Wheat production is expected to touch a new record of 114 million tonnes in the ongoing 2023-24 crop year on higher coverage and provided weather conditions remain normal, a top food ministry official said on Wednesday.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

The last leg of sowing of wheat, the main rabi (winter) crop, is underway and will continue till next week. Till last week, wheat was planted in 320.54 lakh hectares, as per the official data.

Wheat production stood at a record 110.55 million tonnes in the 2022-23 crop year (July-June), compared to 107.7 million tonnes achieved in the previous year.

"We expect that total area under cultivation of wheat will increase this year and God willingly if the climate is alright, the production will be 114 million tonne that's what the agriculture ministry has indicated informally to us," Food Corporation of India (FCI) Chairman and Managing Director Ashok K Meena told reporters.

Area sown to wheat crop is also showing an increase compared to the last year. There was a deficit of one per cent in some states but that will also be made up in the first week of January, he said.

"If that is the level of production, we are very confident that we will be able to procure more than our requirement and also additional stocks needed for the Open Market Sale Scheme (OMSS) for next year," he noted.

When asked if the central nodal agency plans to step up procurement considering the opening wheat balance of 76 lakh tonnes to be on April 1, which is just enough to meet the buffer requirement, the FCI chief said: "We will try our best to provide minimum support price (MSP) to all farmers. Because of the open market sale, the indications are prices have stabilised and are not higher than it was last year.

"Since the wheat MSP is higher by 7 per cent than the last year, we hope that lot of farmers will be willing to give their produce to the FCI," Meena said. Last year, the FCI's wheat procurement stood at 26.2 million tonnes, higher than the annual buffer requirement of 18.4 million tonnes. This year's wheat crop will be ready for harvest from April onwards.

FCI is the central nodal agency that buys rice and wheat to ensure MSP to the farmers and distributes the grains for free to 81 crore poor via ration shops. It also uses surplus grain via OMSS to boost domestic availability and check prices.

Curbing wheat & rice inflation through OMSS:

According to FCI, 5.9 million tonnes of wheat has been sold in the open market through weekly e-auction under the OMSS since June 2023, which has helped stabilise the retail prices.

"There has been hardly any increase in retail wheat prices on YoY basis," the FCI Chairman said, adding that wheat OMSS will continue only till March 15.

However in the case of rice, there is "of course an uptick in prices visible in the open market but the mere fact that we are making huge quantity of rice available through OMSS, I hope that the prices will also not increase substantially", he said.

There has been a lukewarm response for rice under OMSS and so far the FCI has been able to sell only 1.45 lakh tonnes at Rs 29 per kg through weekly auctions.

The FCI is using surplus foodgrain stock of 15.6 million tonnes for undertaking market intervention to stabilise the prices of two key commodities.

"Our OMSS intervention has helped stabilise prices of these two commodities. Rice and wheat being important part of CPI basket, we would hope that food related inflation will get controlled to the maximum possible," he added.

Launch of 'Bharat rice':

With a few takers for FCI rice under the OMSS, the FCI chief said there is a proposal under consideration to retail the grain under the 'Bharat' brand.

The FCI has informed the food ministry that it has enough rice stock for the same. "The quantity and price at which Bharat rice to be sold is the decision of the ministry," he said.
Sources said not much offtake of FCI rice for this new scheme is expected.

Status of this year's rice procurement:

FCI has procured 31.1 million tonnes of rice so far in the ongoing 2023-24 marketing season (September-October), while the target set by state governments is 52.1 million tonnes. In terms of paddy, procurement was at 46.4 million tonnes so far this year, lower than 53.4 million tonnes in the year-ago period.

"One reason for lower procurement is that the paddy prices in the open market are also very high. The other reason is the pace of procurement was slow in states like Telangana, Chhattisgarh and Madhya Pradesh due to assembly elections," he said.

However, the procurement is likely to pick up going forward when the states are about to announce bonus to farmers, he said. In West Bengal and Uttar Pradesh, paddy procurement is sluggish as open market prices this year remain high, he added.

The FCI chief further said there is "no cause of concern about the availability of rice for buffer" because the quantity of rice procured so far is good enough to meet the requirement of welfare schemes.

"The annual requirement of the rice for maintaining a buffer to meet all welfare scheme is 40-41 million tonnes. I am well on course to meet the requirement," the FCI chief said. In the 2022-23 marketing season, the FCI had purchased 56.9 million tonnes of rice.

According to the FCI, total foodgrain stock was at 34.4 million tonnes as on January 1. About 32.8 million tonnes of rice is being milled, which will take the total central pool stock to 67.2 million tonnes.

On funds required for undertaking procurement, the FCI chief said, "Till now, the flow of funds under food subsidy is extremely comfortable. Right now, there is zero short-term loan with FCI."

Catch the latest stock market updates here. For all other news related to business, politics, tech, sports, and auto, visit Zeebiz.com.