April 15, 2011

 

India holds large wheat supply surplus

 

 

The Indian government holds a total foodgrain stock of 44.18 million tonnes as of April 1 this year, which is more than double the required buffer norm.

 

The total stock of rice and wheat in the central pool stood at 44.18 million tonnes as on April 1 this year against the required buffer norms and strategic reserve of 21.2 million tonnes as on the date, according to the latest FCI data.

 

Against buffer stock of 14.2 million tonnes of rice on the date, the stock with FCI and state agencies stood at 28.8 million tonnes on April 1, 2011.

 

Likewise against laid down norm of 7 million tonnes of wheat, the stock with the central government stood at 15.3 million tonnes, the FCI data added.

 

Higher foodgrains stock will help the government in keeping the prices of the two staple commodities under check.

 

The Commission for Agricultural Costs and Prices (CACP) has recently recommended to the Agriculture Ministry that the government should allow exports of wheat and rice as FCI has existing surplus stock valued at about Rs 43,000 crore (US$9.6 billion).

 

A wheat export ban was imposed in early 2007 while shipments of non-basmati rice were prohibited in April 2008.

 

However, the government has allowed export of premium basmati rice.

 

The surplus accumulation of foodgrains in the central government kitty is attributed to bumper production and procurement of rice and wheat in the last few years.

 

According to the third estimates of the Union Agriculture ministry the country's wheat output is expected to leapfrog to a record 84.2 million tonnes in 2010-11 crop year (July-June). The final estimate of the crop in the previous year 2009-10 was also a record 80.8 million tonnes.

 

Similarly, rice production is over 90 million tonnes since 2005-06 barring 2009-10 when the country witnessed largescale drought.

 

According to the third estimates, the country is tipped to produce 94.11 million tonnes of rice.

 

On the back of bumper rice and wheat output, the procurement has also been on the higher side in last 2-3 years.

 

FCI had procured a record 25.3 million tonnes in 2009-10 marketing year (April-March). Last year it was 22.5 million tonnes. The government is targeting to procure 26.2 million tonnes of wheat in 2011-12 marketing year.

 

Similarly, the procurement of rice stood at 34.1 million tonnes in 2008-9 marketing year (October-September). It fell to 32.03 million tonnes in 2009-10.