May 10, 2012

India's food-grain stocks up three folds

Due to record production and higher procurement by government agencies, India's food-grain stocks have swelled to 71.1 million tonnes as of May 1, more than three times its buffer requirement, two food ministry officials said Wednesday (May 9).

The grain stocks will likely enable the government to roll out its ambitious food-security programme within a year, but at the same time it will add to storage woes as the procurement of a bumper wheat crop is underway.

"We expect stocks to rise to at least 80 million tonnes by next month, which is higher than our initial estimates of 75 million tonnes," one of the officials told Dow Jones Newswires.

India's grain storage capacity is 63 million tonnes, which means a sizable quantity has been stored in the open and is vulnerable to spoilage.

Faced with the problem of plenty, Prime Minister Manmohan Singh set up a panel of experts early this month to suggest ways to clear stocks, such as by earmarking more quantities for subsidised sales and allowing more exports.

India's output of wheat in the crop year that started July 1 is expected to reach an all-time high of 90.23 million tonnes, while that of rice is estimated around 103 million tonnes, according to the farm ministry's crop forecast.