India’s wheat procurement at 3-year high, but misses 37.3 million tonnes target

India’s wheat procurement ended on June 30 with 26.6 million tonnes (mt) being procured by the Food Corporation of India (FCI) since April 1. Though the purchase is lower than 37.3 mt target fixed by the government, it could not reach 30 mt as private traders bought at higher than the minimum support price (MSP) of ₹2,275/quintal.

The Centre had procured 18.79 mt in 2022-23 and 26.2 mt in 2023-24. The procurement was a record 43.34 mt in 2021-22.

The purchase in Punjab and Haryana, which ended on May 31, was 19.6 mt, which is 93 per cent of their combined target of 21 mt. On the other hand, procurement in Madhya Pradesh, Uttar Pradesh and Rajasthan ended att 6.98 mt against their combined target of 16 mt.

‘Mandi arrivals not bad’

When the record procurement of 43.3 mt happened in 2021-22, the arrivals at purchase centres or mandis were reportedly at 44.4 mt. But, arrivals in the current season were recorded at over 36 mt, which traders said is not that bad in the current market conditions.

“The government was not in a mood to procure excess quantity than what is required to run all the schemes as farmers also received either MSP or higher prices from the open market. However, it will be a challenge to control wheat prices after November as the commodity will be at the hands of traders with inadequate government stocks to intervene in the market significantly,” said an expert.

The government last year sold 10 mt of wheat in the open market through weekly e-auctions to check any price rise. However, it will have only 8.2 mt surplus (from the quantity procured) over and above the annual requirement estimated at 18.4 mt, if the buffer stock is kept at the same level on April 1, 2025, from its year-ago period.

On June 24, the Centre clamped the Stock Limit Order on stakeholders of wheat, prescribing maximum quantity that processors, traders, wholesales and retailers can keep at any point of time. The Order made with immediate effect will be valid till March 31, 2025.

Asking stakeholders to conform to the stock limits as prescribed under the The Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs (Amendment) Order, 2024 within next 30 days, the Food Ministry had said in a statement.

Each trader or wholesaler can keep a maximum of 3,000 tonnes of wheat any any point of time while the limit for retailer (including of big chain) will be 10 tonnes and for the big chain retailer it will be 3,000 tonnes at their depot. The stock limit for the processors has been fixed at 70 per cent of Monthly Installed Capacity (MIC) multiplied by remaining months of FY 2024-25.