India sets wheat procurement target lower at 35 million tonnes

The Indian government has pegged its wheat procurement target for the 2024-25 rabi marketing season at 35 million tonnes (mt), going by its experience over the past two years. The conservative target, lower than any normal year, is despite the Ministry of Agriculture and Farmers’ Welfare hoping for a record wheat production, sources said.

However, a government official, who was present at the meeting, said the total estimated procuerement as tod by the States was 36.7 mt. The Centre, however, may prune this taking a more realistic approach, he said.

In the 2023-24 season, the government procured about 26.2 mt of wheat out of the targetted 34.15 mt and in 2022-23 only 18.8 mt was bought for the Central Pool against the target of 44.4 mt. The Food Ministry said the lower procurement was due to a dip in production. While traders and processors said the government’s production estimates were on the higher side, the Agriculture Ministry stuck to its output assessment even as prices in domestic market ruled high throughout 2023-24 despite ban on export.

States lacking confidence

However, the Food Ministry was unable to dispute the production estimates and commenced releasing wheat from official reserves starting June 28. Thus far, approximately 9.5 mt have been sold in the open market to maintain price stability.

State officials, barring those from Punjab and Uttar Pradesh, weren’t as confident about reaching the normal procurement levels seen three years ago when the government bought a record 43.34 mt. Nonetheless, they are optimistic about surpassing last year’s levels, according to sources.

Punjab, which had procured the highest among all States at 12.12 mt last year, may procure 13 mt this year, while Uttar Pradesh has told the Centre that it could contribute 6 mt, even higher than the record 5.64 mt achieved in 2021-22. Last year, UP could procure only 2.20 lakh tonnes of wheat.

In Madhya Pradesh, the Centre is hopeful of buying about 8 mt in 2024-25, against 7.1 mt in 2023-24, though the State had contributed 12.94 mt in 2002-21 to become a topper pipping Punjab. The Government did not release the wheat procurement target after the meeting of State Food secretaries.

Output may top 111 mt

Though the Agriculture Ministry is yet to release its official production estimates of wheat for this year, it is learnt that it could be about 111 million tonnes, against record 110.55 mt in 2022-23 crop year (July-June).

Meanwhile, Himanshu Pathak, Director-General of the Indian Council of Agricultural Research (ICAR), said at the annual general meeting of the top research body that the country’s wheat output may exceed the targetted 114 mt this year on good weather and coverage of 85 per cent area with climate-resilient varieties.

E-auction price at 12-week high

However, even as the Government is optimistic about record output, wheat prices in the weekly e-auction of the Food Corporation of India (FCI) reached above the minimum support price (MSP) level on Wednesday and also hit the highest in last 12 weeks.

According to Food Ministry data, FCI sold 4.65 lakh tonnes of wheat out of 5 lakh tonnes offered an an average ₹2,279.45/quintal — up from ₹2,237.15 in the previous week also from MSP of ₹2,275 . The previous high was on December 6, 2023, when the average selling price in the auction was ₹2,301/quintal.