Government procurement picks up steam after a slow start

The government agencies in Punjab, the largest contributors to the central pool stock, purchased a record 1.13 million MT of wheat under the minimum support price (MSP) on Wednesday, after a postponed harvesting period caused by the milder weather.

 

According to Vikas Garg, senior secretary for food and civil supplies in Punjab, “this is an all-time record for a single day procurement by agencies for wheat and rice across the country.” Garg told FE.

After a delay, he added, arrivals throughout the state’s mandis have increased over the last week, and agencies in the state have already bought 6.8 MT of wheat during the rabi marketing season 2024–25 (April–June).

The overall amount of wheat purchased by Punjabi agencies is probably going to reach a record 13 MT for the season in the next week, which would improve the Center’s chances of fulfilling its goal of procuring 30 MT of wheat in the 2024–2025 season.

In the meanwhile, since purchases under the MSP formally started on April 1, the government’s campaign to obtain wheat via the Food Corporation of India (FCI) and state agencies for the current marketing season has reached 13.58 MT as of Wednesday.

Compared to the same time last year, the purchase of wheat has decreased by 20% so far.

A representative of the food ministry said, “We are seeing an increase in wheat arrivals in mandis in the last week as crop harvesting was delayed by a fortnight due to cooler climate in March.”

Thus far, Rajasthan (0.26 MT), Madhya Pradesh (3.1 MT), Uttar Pradesh (0.43 MT), and Haryana (5.19 MT) have all contributed to the central pool purchase.

The food ministry has eased the standard for grain purchase, and the agencies would buy wheat if it is “shrivelled and broken” up to 15% without value reduction against customary requirement of up to increase purchases in Rajasthan and Madhya Pradesh where harvests had been affected owing to recent rains.

up to 6%.

For Madhya Pradesh, the wheat luster loss limit is loosened to 70% without a value reduction.

The government wants to buy 30 MT of wheat this season as opposed to the 26 MT it bought last year, mostly from Punjab, Haryana, Madhya Pradesh, Rajasthan, and Uttar Pradesh, in order to replenish the supply, which at the beginning of the month had dropped to 7.57 MT, a 16-year low.

About 18 MT of wheat are needed by FCI each year to distribute grain under the Pradhan Mantri Garib Kalyana free ration program. Yojana Anna.

An official said, “We need enough stock to carry out open market sale of grain to the bulk buyers next year.”

For the 2024–25 season, the government has set an MSP of ~2,275/quintal, an increase of ~150/quintal over the previous season.

Furthermore, a bonus of <125/quintal has been provided by Madhya Pradesh and Rajasthan above MSP.

The director of the Indian Institute of Wheat and Barley Research, located in Karnal, Haryana, Gyanendra Singh, states that the record-sown area of 34 million hectares, the longer winter season, and the lack of reports of disease outbreaks could cause wheat output this year (2023–24 crop year, July–June) to surpass the current estimate of 112 MT.