New Delhi: Wheat purchases from farmers by the government in India, the world’s second-largest wheat producer, lagged behind year-earlier levels, likely boosting prospects of importing the grain to replenish stockpiles.
Wheat purchases, including from the key growing states of Punjab, Haryana and Uttar Pradesh, reached 9.06 million tonnes between 15 April and 9 May, compared with 9.15 million tonnes a year earlier, the food ministry said.
Purchases may total 10 million tonnes this year, less than the government’s target of 15 million tonnes, the US Department of Agriculture said in a 30 April report. The government bought 9.2 million tonnes last year from local farmers.
India is importing wheat for a second year to boost stocks and may purchase as much as 5 million tonnes this year, according to Alok Sinha, chairman and managing director of Food Corp. of India. The nation bought 6.5 million tonnes last year, the first time it imported wheat in seven years.
The federal government, the biggest buyer of food grains in the country, purchases cereals such as rice and wheat at assured prices from farmers and sells the grain to the poor at below-market prices through a chain of fair-price shops across the country. The assured prices are meant to protect farmers from distress sales in the open market.
The government has guaranteed farmers Rs850 ($21) per 100 kg of wheat, less than the prevailing market price. Harvesting began in March.
India is forecast to produce 73.7 million tonnes this year, compared with 69.35 million tonnes a year earlier. Government agencies had wheat stockpiles of 4.56 million tonnes on 1 April, 14% more than the buffer norm of 4 million tonnes.