Wheat purchase plans on track, says FCI chief

Wheat purchase plans on track, says FCI chief
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First Published: Thu, Apr 19 2007. 12 34 AM IST
Updated: Thu, Apr 19 2007. 12 34 AM IST
New Delhi: India is confident of buying 15 million tonnes (mt) of wheat from farmers this year despite the slow pace of procurement, a senior government official said on Wednesday.
Low purchases by the Food Corp. of India (FCI), the state-run grain procurement agency, forced India to import 5.5mt of wheat in 2006 at very high prices.
“So far, we have procured 2.9mt and we are hopeful of meeting the target of 15mt as procurement will pick up next week,” FCI chairman and managing director Alok Sinha said.
FCI had bought 4.5mt in the same period last year.
Government buying this year has been slow as arrivals in the markets were lower than in the last two years, said another FCI official, who did not wish to be identified.
The official said, so far, 3.9mt of wheat have arrived in the markets since 1 April, compared with 6mt in the same period last year.
The agency buys wheat from farmers only after the produce arrives in the market.
Private firms, which also buy directly from farms, have bought 1.5mt so far this year.
Sinha said arrivals of the grain were slow in the states of Punjab and Haryana due to late harvest in some regions where moisture content in the grain was high and time was needed for it to dry up.
India, the world’s second-largest producer, grows only one wheat crop in a year. The grain is sown in the winter months of November and December, and harvest starts in late March and April.
FCI buys wheat on behalf of the government and sells the grain to the poor at subsidized rates.
Sinha, who has been overseeing the government’s wheat purchases programme, does not believe that private firms will buy the grain in large quantities this year.
“I get a feeling that private trade will not buy more than 50,000 tonnes a day to meet daily demand from flour mills,” the FCI chief said. “I do not see companies buying wheat to trade in the commodity.”
“Private firms may be more interested in pulses. Wheat is no more hot,” Sinha said.
The government’s wheat purchases fell short in 2006 as companies such as Cargill and ITC offered farmers more than the government-fixed price of Rs650 per 100kg.
The government has decided to buy wheat in 2007 at Rs850 per 100kg to avoid any shortfall in procurement. India is likely to churn out 73.7mt of wheat in 2007, up from an earlier estimate of 72.5mt due to favourable weather. The country produced 69.4mt of wheat in 2006.
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First Published: Thu, Apr 19 2007. 12 34 AM IST
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