The government’s wheat acquirement in the current year may be less than half the level last year, as market prices stand above the Minimum Support Price (MSP) allotted by the government. Procurement of the grain by the Food Corporation of India (FCI) and other government agencies at the MSP stood at 17.59 million tonne (mt) on Sunday, which is down by 47% from the past year (43.34 mt).
In Punjab, wheat procurement by government organizations ended with purchases of just 9.39 mt, down a quarter, on year. In Haryana, 4.07 mt of wheat has been procured by organizations, while in Madhya Pradesh, more than 3.92 mt has been procured from the farmers under MSP operations. Past year, the volume of wheat procurement by government organizations in Haryana and Madhya Pradesh was 8.07 mt and 9.4 mt, respectively.
On the lower volume of wheat procurement, the food ministry had mentioned factors such as farmers in Madhya Pradesh, Uttar Pradesh and Gujarat selling to traders and exporters at Rs 2,100-2,400 for a quintal against the MSP of Rs 2,015 for a quintal, and they are also saving some quantities, looking for higher prices of wheat after some months.
The government has modified the estimate of wheat production in the 2021-22 crop year (July-June) to 105 mt, down from its February projection of 111.32 mt, based on reports that the early onset of summer in March has negatively impacted crop yield.
India is focusing at exporting 10 mt of wheat in 2022-23. Though, with the domestic prices of wheat ruling above MSP, the government is likely to take measures to regulate exports soon.