April 30, 2024

India's wheat procurement sees slight decrease, to accelerate soon

India has commenced its wheat procurement for the 2024-25 marketing year, signalling a positive start despite a 17% decrease in total procurement until April 25 compared to the same period last year, Business Standard reported.

This decline in purchases is attributed mainly to delayed harvesting in some major growing states and the ongoing elections in north India.

Officials remain optimistic that procurement will accelerate once various factors affecting purchases settle down. However, the subdued beginning to the purchase season has raised concerns about the total harvest in significant wheat-growing states like Madhya Pradesh. Nonetheless, officials anticipate wheat production for 2024-25 to exceed 112 million tonnes based on the second advance estimate.

The decrease in procurement might also be influenced by farmers holding onto their produce in anticipation of higher prices later in the year or increased buying by private players aiming to replenish their inventories. In states like Uttar Pradesh, private players are reportedly advised not to aggressively purchase until government procurement subsides, resulting in a substantial 397% surge in purchases compared to the same period last year.

India aims to procure approximately 37 million tonnes of wheat this year, surpassing last year's procurement of over 26 million tonnes. Adequate wheat procurement is vital to ensure sufficient supplies for the Centre's free food grains distribution scheme, known as the Pradhan Mantri Gareeb Kalyan Ann Yojana (PMGKAY), and to maintain domestic price stability. Additionally, these purchases will help replenish reserves, which had declined to multi-year lows as of April 1, 2024.

-      Business Standard