The state’s wheat inventory could be at its lowest in 16 years.

The Ministry of Nutrition trusts the feedback from the Ministry of Rural Affairs, according to which this year’s record production of wheat is optimistic to replenish official stocks. Official reserves, known as buffer stocks, are likely to be the lowest in 16 years, but close to the buffer standard required from April 1. “We expect an increase in the total wheat area this year and God willing, if the climate is good, the production will be 114 million tons (mt). We have been informed by the agriculture ministry” said Food Corporation of India (FCI) chairman and managing director Ashok Kumar Meena.

Procurement below target

Despite the agriculture ministry’s harvest estimate of 110.55 million tonnes of wheat. In 2022-23, FCI was able to procure only 26.2 million tonnes despite a target of 44 million tonnes. The Ministry of Agriculture has also estimated the buffer production volume at 107.74 million tonnes in 2021-22, but the government has procured only 18.79 million tonnes. Private traders and industry estimated wheat production to be significantly lower than the government’s forecast in both years. The state has so far sold about 6 mt of wheat on the free market and to cooperatives. Another 2.5 million tons are likely to be sold by the end of February, when the amount accumulated from official stocks will be higher than the 26.2 million tons obtained in the 2023-2024 fiscal year, officials said. The annual wheat demand in all systems (without open market sales) is approximately 18.4-19 million tons.

The buffer standard of wheat on April 1 is 7.46 mt, against which the FCI reserve in 2008 was 5.8 mt. After that it was slightly above the buffer standard of 8.06 mt in 2017 and 8.3023 mt.

Acreage Deficit

Meena said the government expects to get a good amount of wheat in 2024-2025 depending on market prices and crop yield. said that although the area under wheat is in deficit in some states, it is likely to be covered in the coming days based on inputs from the agriculture ministry. As of last week, 320.54 lakh hectares (lh) of wheat had been planted, slightly down from 324.58 lh a year ago, according to official data. “If the production is at this level, we are very confident that we will be able to get more than the demand next year and also the additional supplies required for the Open Market Sales Scheme (OMSS).

 further said that the government is doing its best to provide minimum support price (MSP) to wheat producers. He said that since the launch of the OMSS system in the last week of the June 2023-24 levy (compared to the previous week of January for the 2022-23 fiscal), prices have stabilized and are not higher than the last year “Since the wheat MSP has been increased by 7 percent this year, we hope that many farmers will be ready to hand over their produce to FCI,” said Meena. The government has decided to start procurement of wheat a month earlier (March 1) than the usual April 1 as it expects early arrival in many areas due to regular sowing..

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