India. Govt food grain inventory at 45.4 mln tn as of Jan 1, up 27% on year

16.01.2019

The government had 45.4 mln tn of food grain in its central pool as of Jan 1, more than double the fixed buffer of 21.4 mln tn, a senior official told Cogencis today. At this level, food grain stock is nearly 27% higher on year.

Of the total stock, wheat was 27.1 mln tn, over 38% higher than the year-ago period, while rice was 18.3 mln tn, up 13% on year, according to the data shared by the official.

According to buffer and strategic resereve stock norms, the government must have 13.8 mln tn of wheat and 7.6 mln tn of rice in its pool as of Jan 1.

The rise in stocks was primarily due to robust procurement at higher minimum support price this year. For the 2018-19 marketing season (Apr-Mar), the government had fixed the support price for wheat at 1,735 rupees per 100 kg, up from 1,625 rupees the previous year.

The rise in procurement can also be attributed to higher wheat production in 2017-18 (Jul-Jun). According to the farm ministry's fourth advance estimates, Indian farmers likely harvested a record 99.7 mln tn of wheat in 2017-18.

The government has set a wheat production target of 100.0 mln tn for 2018-19 with the support price set at 1,840 rupees per 100 kg for the 2019-20 marketing year.

To deal with the excess stock in the central pool and ensure supply of the foodgrain in the country, Food Corp of India started weekly auctions under the open market sales scheme from July.

The regular wheat auctions by the government are, however, seen weighing on prices of the food grain in spot markets.  

cogencis.com

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