The Indian government has bought around 9.6 million tonnes of new season wheat from farmers as market arrivals pick up, raising hopes it can build healthy buffer stocks from domestic grain purchases.
Buying had dipped with grain slow to make it to markets as farmers turned to manual harvesting to maximise the yield of straw, widely used as fodder. Domestic fodder prices have recently firmed. "We have procured 9.59 million tonnes until on Monday against 9.2 million tonnes bought in the year-ago period," an official of the Food Corp of India, which buys the grain, told Reuters.
"We now hope to procure 11-12 million tonnes until May 31, when the procurement programme ends," another official said. India needs 12 million tonnes of wheat annually to run a public distribution system and welfare schemes for the poor.
Low wheat purchases by the state-run grain procurement agency forced India to order expensive imports totalling 5.5 million tonnes in 2006. The slow pace of buying earlier this year forced the government-owned State Trading Corp (STC) to last month float a tender to import one million tonnes.
Farm Minister Shared Pawar said last week India might import four to five million tonnes of wheat this year to build stocks to meet any sudden spurt in demand. The second official said imported grain would cost roughly the same as domestic wheat. "Transportation from main producing states in the north to the south costs more than importing through ports in southern India," the official said.
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