Government wheat buying starts on positive note

After last year’s slippage, the central government has some cheer on wheat procurement, with its purchase this year till April 12 being six per cent more than in 2016-17 at this date, at 3.8 million tonnes (mt). If the trend stays, the Centre might reach its target of 33 mt in wheat procurement well on time.

This does not include the extra five mt promised by the newly elected Yogi Adityanath government in Uttar Pradesh.

India’s annual wheat procurement to run the subsidised food programme starts from April. The bulk of purchase is completed in the first three months of the financial year (which began April 1).

The government recently re-imposed the 10 per cent import duty on wheat, days before state and central agencies started their annual procurement. It also raised the Minimum Support Price (MSP) by ~100 a quintal for 2017-18, to ~1,625 a qtl.

Last year, the government had aimed at 28 mt of wheat buying but could not exceed around 23 mt. The main reason was attributed to less than expected output, though it also said production in the 2016-17 crop marketing year was 92.29 mt, about 5.76 mt more than the previous year.

For the 2017-18 crop marketing year that began April 1, the government estimates wheat production at a record 96-plus mt, with good sowing and favourable weather. Data from the Union food ministry says till April 12, wheat procurement in Punjab was 0.25 mt, as against 0.11 mt last year. In Haryana, 1.48 mt, as against 1.49 mt at this time last year.

In Madhya Pradesh, where the biggest drop took place last year as compared to the target, purchases by state and central entities this year till April 12 were 2.08 mt, around 4.5 per cent more than the same period last year. In Uttar Pradesh, where the new Adityanath government has said it will procure a record eight mt of wheat from farmers, state and central agencies have so far purchased 11,883 tonnes, against 11,568 tonnes at this time last year.