New Delhi: At a 16-year low, official reserves of wheat, maintained by the Food Corporation of India (FCI), have dropped 4.7% to 29.91 million (mt) as of June 1 from 31.39 mt in the year-ago. Official data shows that the previous lowest wheat stock in the central pool was at 24.12 mt on June 1, 2008.
This has resulted in a rise in prices. In the last one week, wheat prices have shot up by 7% and are expected to rise by another 7% in the next 15 days, according to Dainik Bhaskar.
Though the government has so far procured 264 lakh tonnes of wheat this season, the government had set itself a target of 372 lakh tonnes. The procurement time has also been extended till June 22, but relatively lesser quantities of wheat are reaching procurement centres. If the situation persists, the Union government may have to import wheat to meet the needs of its free grain scheme under the public distribution system.
According to Sunil Agarwal from Bhopal, quoted by Dainik Bhaskar, millers have been waiting for the auction of government stock in the open market before the festive season starting from Rakhi. Wheat in the open market is Rs 2600-2700 a quintal. In such a situation, the price can increase by Rs 3 in 15 days. Wheat flour made by buying expensive wheat will have to be sold at Rs 30-31 a kg. Now it is 28 rupees, he said.
To arrest rising prices of flour, the government imposed stock limits for traders, and they could not store more than 5,000 quintals. As a result, traders do not have wheat.
The government sold wheat in the open market several times a year to control prices. This has led to a reduction in government stocks.
During the latest wheat crop cycle, the per acre productivity has decreased by 5 quintals due to fog and wind. Under normal conditions, the yield is up to 20 quintals. In Madhya Pradesh, 22.67 lakh tonnes have been procured less than the last time. Wheat stocks have been dwindling since the start of the Russia-Ukraine war.
Commenting on the rising wheat prices, Congress president Mallikarjun Kharge called it, “Modi nahi, mehengayi 3.0 (Not Modi, Inflation 3.0)”.