As we have ample stocks, no need for wheat imports now: DGFT

At 26.2 million tonnes currently, wheat procurement has surpassed last year’s total procurement of 18.8 million tonnes“As of date, the need for import has not been felt. Production has been good. Since there is a prohibition in force, that means there is adequate stock with farmers and traders. The FCI (Food Corporation of India) also has adequate stocks,” Santosh Sarangi, Director General of Foreign Trade (DGFT).

As wheat procurement for the current season draws to a close, the Government is optimistic that there is enough stock available with farmers and traders to meet domestic demand and there will unlikely be a need for imports.

Stocks vs demand:

Wheat procurement in the current rabi season was at 26.2 million tonnes (mt) as of June 6, which has already surpassed last year’s total procurement of 18.8 mt. The wheat stock with the Food Corporation of India (FCI) has improved to 31.2 mt as of May 30 from 29.03 mt as of May 1, whereas the annual requirement of the government for public distribution and other welfare schemes is 18.4 mt.

Despite untimely rains, major contributing factors to healthy procurement this year have been the grant of relaxation by the government in quality specifications of wheat affected by rains, opening of procurement centres at village and panchayat level, carrying out procurement through co-operative societies, gram panchayats, and arhatias, and permission to engage FPOs for procurement operations, the Food Ministry said last week in a statement.

However, looking at the mandi prices prevailing in Uttar Pradesh and Bihar during the current procurement season, where normally farmers used to sell below minimum support price (MSP), many traders are sceptical about the government’s estimate of record production of nearly 112 mt. The Roller Flour Millers Association of India, which hired a private agency, has pegged the production close to 103 mt.

‘Just rumours’:

Some traders may be spreading rumours about a possible shortage of wheat and the need to import as they want a rate increase for the wheat stock they have aggregated, another official tracking the matter said.

“It is difficult to believe that any stockist will buy at a higher price. Had the production been at record, prices could not have gone above MSP when exports are banned, and there is no possibility of opening the window this year,” said a trader. With current duty of 40 per cent at $290/tonne free-on-board, wheat is unlikely to be imported even in southern ports, the trader said. Any decision on import has to be at zero duty, and it may help cool the sentiments, he added.

The all-India average retail price of wheat has softened from a peak of ₹33.21/kg in February to ₹31.27/kg in May, but it is still higher by 6.5 per cent from a year ago (May 2022). Atta (wheat flour) prices were higher by 10.5 per cent at ₹36.42/kg last month from a year ago, though down from a record ₹37.8/kg in February this year, consumer affairs ministry data show.