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Wheat Stocks Fall to 16-Year Low; Private Traders Push up Buying Spree: Report

As of April 1, the central pool stock was 75.02 lakh tonnes. Its previous lowest was 58.03 lt in 2008.
Representative image of the wheat crop. Photo: Flickr/beana_cheese (CC BY-NC 2.0)

New Delhi: As wheat stocks in the central government’s reserves hit a 16-year low, private traders have pushed up their buying spree despite the government “informally” asking them to avoid buying new-season wheat from local farmers till the procurement target is met, the Hindu reported.

As on April 1, the central pool stock was 75.02 lakh tonnes (lt). Its previous lowest was 58.03 lt in 2008, per the newspaper.

It is still at 42,000 tonnes above the buffer norm of 74.6 lt, it added.

“We do not know how much the government would be able to buy. Nor we know how much quantity it will offer to processors. Then there is also maximum quantity restriction in the weekly tender. If we do not buy now, how will we meet our requirement,” a flour miller told the daily.

Although the Centre has set a target to purchase 372.9 lakh tonnes in the marketing year starting from April 1, officials have indicated that the “realistic” procurement might range between 310 lakh tonnes to 320 lakh tonnes. The Ministry of Agriculture has forecasted wheat production to reach a record 1120.2 lakh tonnes for the 2023-24 crop year (July-June).

Sources told the newspaper that procurement has reached 27.2 lakh tonnes as of April 13, marking a 7% increase from 25.5 lakh tonnes compared to the same period last year.

However, procurement in Madhya Pradesh has been disrupted due to recent rains, resulting in a decrease in total procurement to 17.73 lakh tonnes from 20.06 lakh tonnes. The government aims to purchase 80 lakh tonnes from Madhya Pradesh.

In Rajasthan, despite the state offering a Rs 125/quintal bonus similar to Madhya Pradesh, the Centre has managed to procure 61,572 tonnes. Although this represents a significant increase from the 430 tonnes procured last year, it may still be considered negligible compared to the reported arrival of 3.38 lakh tonnes.

On the other hand, there has been confusion in Uttar Pradesh over wheat procurement, the daily reported.

“One day they (state officials) ban permit to take out wheat outside mandi’s jurisdiction, and in 3 days they withdraw that order. One day a mandi prohibits private trader, the other day that order gets nullified. Food department wants to follow Centre by scaring private traders, agriculture department asks mandi samitis to ensure farmers sell at higher prices,” the daily quoted a stockist in UP’s Bahraich district as saying.

The Centre has bought 12.48 lt of wheat from UP whereas the aim is to buy 60 lt in this season, the report said.

“We know wheat will come to market whether it is stored by government or farmers hold it. We will wait until that stock arrives in mandis rather to get into unwarranted losses. If we buy, we fear there will be raids. If not, the government will sell at lower rates,” said the stockist.

The daily reported that UP farmers have decided not to bring their entire crop at once and rather sell in tranches.

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