June 3, 2010
Indian state falls short of wheat procurement target
The sluggish wheat procurement process in India's Uttar Pradesh is likely to end only at the half-way mark as the season ends on June 30.
While Uttar Pradesh (UP) had targeted to procure four million tonnes during this procurement season beginning April 1 through June, so far only about 1.7 million tonnes has been purchased with less than a month to go.
Of the four million tonnes target, Food Corporation of India (FCI) had the target of 100,000 tonnes, of which it had procured about 25,000 tonnes.
There are several factors leading to low procurement, including high temperature during harvest, which affected production and resulted in shrivelling of wheat, and higher prices in the open market vis-Ã -vis Minimum Support Price (MSP) of INR1,100/quintal (US$23).
"The procurement has remained sluggish this season both with FCI and the UP agencies. It is most likely that we would be able to achieve only half our combined targets," an FCI official said.
The current open market rate of wheat is around INR1,200/quintal (US$26) and the farmers get cash upfront against the payment through cheque by FCI and state agencies.
