Government targets wheat procurement of 35.7 million tonnes. On October 2018, the Central Government had increased Minimum Support Price for Wheat by INR 105 per quintal to 1840 per quintal for harvest season 2019. Even though global prices of wheat have seen a slump, the Indian Government is trying its best to ensure wheat farmers in India are paid above or equal to Minimum Support Price (MSP) for wheat.
Government Targets Procurement of 35.7 Million Tonnes of Wheat
As part of welfare schemes for farmers by the Government, the Food Corporation of India along with State Procurement Government Agencies buy wheat from farmers at MSP. Centre has set a target of 35.7 million tonnes of wheat procurement for the Financial Year 2019-20 confirmed by a senior official of the Food Ministry.
Previous financial year, the Government had procured 35.8 million tonnes of wheat surpassing its target of 32 million tonnes.
As per current rough estimate, the Government has already procured almost 30 million tonnes of wheat till date and we expect them to cross their target of 35.7 million in by the end of June 2019.
FCI to Auction 10 Million Tonnes of Wheat
Currently, Food Corporation of India (FCI) have more than 45 million tonnes of wheat stocked in their warehouses. This includes old stock of 15 million tonnes approximately and 30 million tonnes of wheat procured till date, as per estimated data from official site.
The Government announced on first week of May that it would auction 10 Million Tonnes of wheat through an e-auction under open market scheme at INR 2080 per quintal after procurement season.
This price is INR 240 per quintal more that the MSP for Wheat set the by the Government. Wheat prices are already increasing due to major buying by the FCI and State Agencies and since the auction announcement, prices will increase in the coming days.
Import Duty on Wheat hiked to 40%
The Central Government had hiked import duty from 30 percent to 40 percent on 26th of April 2019 to support the wheat farmers. Wheat production is high this year and will cross 100 million tonnes as hiked duty makes imports nearly impossible for traders and flour mills.
High wheat production in 2018 led to local prices falling by 11% after procurement from the government agencies stopped in July 2018. Experts in trade suggest they are witnessing a similar scenario to 2018 where the prices decreased a couple of months after government stopped procurement. However, the announcement of e-auction of 10 million tonnes of wheat will keep the prices high in the coming months.