Govt holds on to huge wheat stocks, three times the requirement

Just three months prior to the commencement of the wheat procurement drive for 2013-2014 season, the government has wheat stocks which is more than three times the strategic reserve and buffer stocks norms.

At the start of this month, the Food Corporation of India (FCI) and state government owned agencies had a wheat stocks of more than 34 million tonne, while the requirement is only about 10 million tonne.

This implies that if a chunk of wheat stocks are not liquidated in the private market or exported during next few months, the government is expected to face acute storage crunch when purchase operations starts from April 1.

The key wheat growing states of Punjab and Haryana have wheat stocks of 12.1 and 8.3 million tonne respectively. Similarly Rajasthan and Uttar Pradesh have grain stocks of 2.3 and 2.5 million tonne respectively.

"We need to create space for new wheat crop during next three months," a FCI official told FE.

As per the latest data, the government food grains stocks (consisting of mostly wheat and rice) at the start of the month is reported at more than 66 million tonne against the norms of only 25 million tonne. The rice stocks is at present reported at 32.2 million tonne.

Current food stocks is also at the alarming level as FCI and other agencies have storage capacities to keep food grains to the tune of 61 million tonne. This includes 18 mt of cover and plinth capacity that can't keep the grains intact for more than a few weeks.

Meanwhile, the Commission for Agricultural Costs and Prices (CACP) has suggested that the government should push for wheat exports of a record 10 million tonne from its huge stocks during next fiscal.

"A 10-million-tonne wheat export can be achieved in the 2013-14 fiscal, if the government acts aggressively and quickly," CACP chairman Ashok Gulati recently stated.

... contd.

ALSO READ

Govt aims to bring down CAD to 2.5% by 12th Plan-end, says Montek

Raghuram Rajan not in favour of sovereign bond to finance CAD

Airfares: Travel agents to keep shutters down on Tuesday

Companies expand background check on jobseekers