NEW DELHI: The spike in wheat prices in international market due to the ongoing Russia-Ukraine war may bring some benefit to Indian farmers in terms of getting a good price for their produce and the government may have to procure less quantity of the foodgrain at assured price (MSP) as private players would buy more directly from farmers, sources said. Less procurement by the government would reduce the subsidy burden as well.
Union food secretary Sudhanshu Pandey on Saturday said the government expected that further firming up of wheat prices will result in an increase in its export from India. He said by February-end, export of the key foodgrain stood at 66 lakh tonnes, which is higher than that of the previous best of 65 lakh tonnes in 2013-14. This may touch 70 lakh tonnes by March-end.
Wheat prices in the international market have hit record highs since Russia’s military strikes in Ukraine started as it has cut global wheat exports by 30%.
Pandey said it is an “opportunity” for Indian exporters as the new wheat crop will be available from mid-March the crop of other global wheat producers will mature in August and September. As a result, global wheat prices have already gone up and are ruling in the range of Rs 24,000-25,000 per tonne, the secretary said.
Currently, the Food Corporation of India (FCI) has a total stock of around 520 lakh tonnes of foodgrain, including nearly 240 lakh tonnes of wheat. This places the government in a comfortable position to release more wheat from its stock for sale in the open market. “The foodgrain that we sell in the open market from the central pool is only meant for domestic purposes and can’t be exported as per the WTO norms,” said an official.
But this helps the exporters to ship out their stock made from their own procurement once they buy the FCI grain for domestic requirement.
“We expect the export to increase because of high demand. There is a high possibility that private players would directly buy from farmers in big quantities during the coming harvesting season, particularly in Madhya Pradesh and Rajasthan where best quality wheat is produced. This will also have an overall impact on the total procurement target and if the current condition continues, we may end up procuring around 350 to 360 lakh tonnes during the next crop season against the target of 440 lakh tonnes,” said a government official.
Union food secretary Sudhanshu Pandey on Saturday said the government expected that further firming up of wheat prices will result in an increase in its export from India. He said by February-end, export of the key foodgrain stood at 66 lakh tonnes, which is higher than that of the previous best of 65 lakh tonnes in 2013-14. This may touch 70 lakh tonnes by March-end.
Wheat prices in the international market have hit record highs since Russia’s military strikes in Ukraine started as it has cut global wheat exports by 30%.
Pandey said it is an “opportunity” for Indian exporters as the new wheat crop will be available from mid-March the crop of other global wheat producers will mature in August and September. As a result, global wheat prices have already gone up and are ruling in the range of Rs 24,000-25,000 per tonne, the secretary said.
Currently, the Food Corporation of India (FCI) has a total stock of around 520 lakh tonnes of foodgrain, including nearly 240 lakh tonnes of wheat. This places the government in a comfortable position to release more wheat from its stock for sale in the open market. “The foodgrain that we sell in the open market from the central pool is only meant for domestic purposes and can’t be exported as per the WTO norms,” said an official.
But this helps the exporters to ship out their stock made from their own procurement once they buy the FCI grain for domestic requirement.
“We expect the export to increase because of high demand. There is a high possibility that private players would directly buy from farmers in big quantities during the coming harvesting season, particularly in Madhya Pradesh and Rajasthan where best quality wheat is produced. This will also have an overall impact on the total procurement target and if the current condition continues, we may end up procuring around 350 to 360 lakh tonnes during the next crop season against the target of 440 lakh tonnes,” said a government official.