Wheat buying falls on lower market arrivals

Wheat buying falls on lower market arrivals
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First Published: Mon, Apr 23 2007. 07 35 PM IST
Updated: Mon, Apr 23 2007. 07 35 PM IST
Reuters
New Delhi: India’s wheat purchases from farmers in the new season are estimated at 5.9 million tonnes until 23 April, down 18% from the purchases on the same date a year ago, a senior Food Corporation of India official said.
Low purchases by the state-run grain procurement agency had forced India to order an expensive import of 5.5 million tonnes of wheat in 2006.
“So far we have purchased 5.9 million tonnes of wheat out of the total arrivals of 7.5 million tonnes but we are confident of meeting the target of 15 million tonnes of procurement,” the official said.
Wheat purchases peak in mid-May and last until the end of the month.
FCI had bought 7.2 million tonnes from farmers at this time last year from the total arrivals of 8.9 million tonnes.
“Last year the harvest began early because of hot weather and arrivals too began early,” the official said.
He said market arrivals were also lower this year because of manual harvesting by farmers.
Manual harvesting helps farmers retain larger volumes of straw which is used as fodder. Domestic fodder prices have firmed in recent months.
Traders said farmers could be holding back their stocks in anticipation of a rise in prices in the coming months.
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 subsidised rates.
The government’s wheat purchases fell short in 2006 as companies like Cargill and ITC Ltd offered more to farmers than government-fixed price of Rs650 a quintal.
The government has decided to buy wheat in 2007 at Rs850 a quintal to avoid any shortfall in procurement.
The country is likely to produce 73.7 million tonnes of wheat in 2007, up from an earlier estimate of 72.5 million due to good weather. India produced 69.4 million tonnes wheat in 2006.
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First Published: Mon, Apr 23 2007. 07 35 PM IST
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