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Informist, Tuesday, May 6, 2025

 

By Afra Abubacker

 

NEW DELHI – In a sharp turnaround from the subdued trend seen in recent years, India's wheat procurement so far in the rabi marketing season 2025-26 (Apr-Mar) has already exceeded last year's total. With nearly two months left in the wheat procurement window in many states, purchases are set to continue.

 

As of Tuesday, the Food Corp. of India had procured close to 28 million tonnes of wheat, or more than 84% of its revised target of 33.3 million tonnes. This is a remarkable 19% jump over the same period last year, and 5.1% higher than last year's total purchase of 26.6 million tonnes. Seeing the impressive pace of procurement, the government revised its target twice, first from 31.3 million tonnes to 32.3 million tonnes, and then by a further 1 million tonnes.

 

Officials now expect India to achieve its FY26 wheat procurement target for the first time in three years. The government's wheat reserve feeds 800 million people through welfare programmes, and checks inflation through open market sales. 

 

Behind the brisk wheat purchases is a broader story--record wheat production, state incentives over the Centre's minimum support price for wheat farmers, an early start to procurement, and the readiness of procurement centres. According to the agriculture ministry, India's wheat output for the crop year 2024–25 (Jul–Jun) is estimated to hit a record 115.4 million tonnes, up from 113.3 million tonnes last year.

 

MIXED BAG

Madhya Pradesh has emerged as the season's star performer. With the state government offering a bonus of INR 175 over the Centre's minimum support price of INR 2,425 per 100 kg, Madhya Pradesh has met 94% of its revised 8-million-tonne goal by procuring 7.54 million tonnes so far. This is nearly 88% up on year. Last year, untimely rains and firm market prices had weighed on wheat procurement in Madhya Pradesh and also pulled down national procurement numbers.

 

Rajasthan, too, is seeing an extraordinary upswing. The state has offered a similar bonus of INR 150 per 100 kg over the minimum support price. As of Tuesday, the government had procured 1.32 million tonnes, more than double its purchases by the same time last year, from Rajasthan's farmers.

 

By contrast, Punjab, the top contributor to the government's granary, has registered a 1.2% on-year decline in wheat procurement. The government has purchased 11.3 million tonnes of wheat so far, down from 11.4 million tonnes bought by the same date last year. With only a week remaining in the procurement window, Punjab and Haryana have only met about 91% of their respective targets. Haryana's procurement is about 6.8 million tonnes, up 1.5% on year. 

 

"Procurement slows down at the end of the season. Also, private purchases are higher this year," an FCI official said by way of explanation. Procurement operations in Punjab and Haryana are slated to end by May 15. Asked if the government would extend the procurement period, the official said, "It does not feel like there is a requirement."

 

Private purchases used to be minimal in Punjab due to a robust procurement infrastructure. However, last year, Punjab's millers grappled with lower stocks and higher prices, as the government sold less wheat in the open market. In the financial year 2024-25 (Apr-Mar), the government's sales in the open market amounted to just 3.0 million tonnes, against 9.4 million tonnes sold in FY24. This has resulted in private traders and millers buying directly from farmers in the current rabi marketing season.

 

"Private trade is around 10.5 lakh tonnes (1.05 million tonnes) this time. By mid-May, it should reach 11 lakh tonnes (1.1 million tonnes)," Dinam Sood, a private miller in Punjab, said. Last year, private purchases had amounted to about 700,000 tonnes, he said.

 

Sood added that while arrivals may slow down soon, many farmers are still holding stocks back, expecting better prices later in the year. Going forward, the market can depend on private resales and these stocks from farmers even if the government delays open market sales, he said. 

 

Procurement in Uttar Pradesh continues to be slow. The state has so far met only 29% of its 3-million-tonne target by procuring 877,081 tonnes wheat. "Despite being the (country's) largest wheat producer, Uttar Pradesh has never topped the charts in government procurement, and this year too the trend is expected to be normal," Rahul Chauhan, director, IGrain, said in a note.

 

However, he noted that Uttar Pradesh is a "trusted player" for year-round wheat supply. "Even when other states faced shortages, UP ensured uninterrupted wheat availability in the market," Chauhan said. "With the highest number of flour mills in the country, UP remains the preferred sourcing hub for big companies and millers." 

 

The rebound in wheat procurement is not just a win for government warehouses. It has larger economic implications. Strong procurement and healthy stocks have allowed officials and traders to rule out the need for imports this year.

 

While the Centre lifted stock limits on wheat from Apr. 1, the market remains cautious. For two years, stockholding restrictions had distorted trade and limited bulk buying. But with this season's strong procurement, hopes for a freer wheat market are gaining ground. The final procurement figure will signal whether the government will allow wheat exports after three years.  End

 

Edited by Rajeev Pai

 

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