Indian procurement agencies procure 38% less wheat at 15.3 million tonnes this season

Procurement of wheat at minimum support price (MSP) stood at 15.3 million tonnes (MT), down by more than 38% from the year-ago level. Amid a surge in exports and reports of a decline in production which have pushed mandi prices above the minimum support price (MSP), wheat procurement by the Food Corporation of India and state government agencies has declined sharply compared to the previous year.

Currently, mandi prices of wheat in key producing states like Punjab, Haryana, Madhya Pradesh and Uttar Pradesh are ruling at 8-10% above the MSP of Rs 2,015 per quintal.

The sharpest fall in wheat procurement this session has been in Uttar Pradesh, Haryana and Rajasthan. In Uttar Pradesh, the biggest producer of grain, where the state government has purchased just 0.11 MT of wheat so far, while it had procured 0.87 MT during the same period in 2021.

In Haryana so far, wheat purchase from farmers has declined by more than 50% to 3.69 MT against 7.5 MT of purchase during the same period last year.

In Rajasthan, only a small quantity of wheat has been purchased by government agencies against 0.67 MT procurement last year.

More than 8.35 MT of wheat has been procured in Punjab so far against 9.6 MT of grain purchased during the same period last year. Punjab is the second-biggest producer of wheat in the country and also contributes the highest volume of grain to the central pool.

Madhya Pradesh, which had announced incentives such as the abolition of mandi taxes and other levies from the wheat purchased for export, state civil supplies corporation till Thursday has procured 3.1 MT of wheat against 5.8 MT purchased during the same period last year.

In other key producing states such as Uttarakhand and Himachal Pradesh, the wheat procurement has been rather sluggish so far.

This time, wheat procurement is being keenly watched as a surge in exports because of disruption in global supplies over the Ukraine-Russia conflict has pushed up demand for wheat from India. India is aiming to export 10 MT of wheat in 2022-23. In 2021-22, India exported a record 7 MT of wheat.

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