Government may end up buying less than 30 million tonnes of wheat GRAIN GAINS

Wheat procurement actual versus target till May 12, 2017

By all estimates, wheat procurement is expected to be around 30 million tonnes in 2017-18, short of the initial target of 33 million tonnes.

Food Minister Ramvilas Paswan in an interview to Business Standard did estimate that final procurement figures could be around 30 million tonnes, but said that it won't have any impact on stocks as the purchases were more than last year and government has enough stock in hand.

Till date, government has procured over 27 million tonnes of wheat — 23 million tonnes more than last year.

If the final procurement falls short of 33 million tonnes, it will be the second successive year of the government falling short of its target.

However, unlike last year, the culprit this year seems to be the increased buying by private traders and not a overestimation of production, which most traders and industry analysts believe is expected to be significantly more than 90 million tonnes. Though, it might not be near government's estimate of 97.44 million tonnes.

If government officials and traders are to be believed, it’s the high price offered by private traders in Madhya Pradesh and Uttar Pradesh which has lured them away from government purchasing centres.

So far, government has purchased 5.9 million tonnes of wheat from farmers as against the target of 8.5 million tonnes. In Uttar Pradesh, it has purchases 1.59 million tonnes against a target of 3 million tonnes.

In Madhya Pradesh, traders said that the actual farmers' registration for procurement was almost 40 per cent less than usual because most growers preferred to sell their wheat to private traders, who are giving them ready cash as against the government procurement centres where the payment is slow. They also said the price offered by private traders was around ~200 to ~300 per quintal more than the MSP (Minimum Support Price) of ~1,650 per quintal.

State officials estimate this year’s wheat purchase at 7 million tonnes — a deficit of 1.5 million of the govnernment target.

Though, the prices have softened now, but registration hasn't been reopened.

In Uttar Pradesh, there is still time for the government to meet its target as much of the crop is harvested late, especially in the western part of the state where the sowing was delayed due to late harvest of sugarcane.

However, how much that will push up the total procurement figures closer to the target remains to be seen.