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Informist, Monday, May 19, 2025

 

--Govt official: See 2025-26 wheat procurement 30 mln tn vs 33.3 mln tn aim

 

By Pallavi Singhal

 

NEW DELHI – The government is likely to miss the revised wheat procurement target of 33.3 million tonnes for the marketing season 2025-26 (Apr-Mar) and may wrap up the entire procurement exercise around 30 million tonnes, according to government officials. This comes on the back of sluggish purchases in key states like Punjab and Uttar Pradesh. Food Corp. of India has procured 29.6 million tonnes of wheat as of Monday, with officials indicating that crossing the 30 million tonnes is unlikely as procurement in some key states have already closed. This would the third year when the government misses the wheat procurement aim. 

 

 

"We have been able to procure about 11.9 million tonnes of wheat from Punjab so far, lower by at least 1.5-2.0 million tonnes than what we had hoped for. Similarly, we had set a target of 3 million tonnes of procurement from Uttar Pradesh but have not even been able to touch the 1 million tonne figure there," one of the official mentioned above said. 

 

Although procurement will continue in some states till Jun. 30, in key states like Haryana and Punjab it was scheduled only till May 15. Therefore, the extended procurement period in Madhya Pradesh, Uttar Pradesh, and Rajasthan is unlikely to significantly impact overall numbers. "We are sure of touching 29.8 million tonnes, but anything after that may be unlikely," an official of the Food Corp. of India said. 

 

At the start of the season, centre had set a target of 12.4 million tonne procurement from Punjab, but eventually raised it to over 13 million tonnes. According to market sources, as much as 12.9 million tonnes of wheat has already been bought in the state, exhuasting its supplies. Of this, while 11.9 million tonnes has gone to the government and as much as 1 million tonne by private traders. In many districts, the price paid by private traders was above the minimum support price of INR 2,425 per 100 kg, market sources said.

 

This low procurement comes in stark contrast to the government's claims of high wheat production, which had led the government to raise its wheat procurement targets by 2 million tonnes. For crop year 2024-25 (Jul-Jun), the agriculture ministry in its second advanced estimate had projected wheat output at record 115.4 million tonnes, up from 113.3 million tonnes last year. 

Informist had exclusively reported May 8 that officials estimated wheat production may be even higher than its projection at 117-118 million tonne. 

 

"While initial arrivals had instilled hope in government's heart of a very high wheat production number, we are now being humbled with prices hovering at or above minimum selling prices. This indicates we may have overassessed based on initial supplies. Maybe government could buy a lot because private trade was not (buying enough)," another official explained. Achieving the target is even more unlikely as wheat prices in most states are currently higher than the MSP in most states, the official said. 

 

Madhya Pradesh had emerged as the season's star performer as the government procurement from the state rose on the back of state government's incentive, offering a bonus of INR 175 over the Centre's MSP. Procurement in Rajasthan, too, witnessed an extraordinary upswing with the state offering a similar bonus of INR 150 per 100 kg over the MSP.

 

"Traders did not buy in Madhya Pradesh and Rajasthan as government was buying at higher prices. But dry pipelines led them to buy higher amounts from Punjab, up even by INR 5 per kilogram over MSP, when they saw a shortage in the market. Things and production may not be as dandy as they seem," said agriculture economist Deepak Pareek, who had given a wheat production estimate as low as 98 million tonnes for 2024-25 crop year.  End

 

Edited by Akul Nishant Akhoury

 

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