Rabi Marketing Season 2023-24 Wheat Procurement Progress So Far: Will Government Reach Its Target?

India’s wheat procurement for the current rabi marketing season 2023-24 has been progressing smoothly. As of 7 May 2023, the government has procured 246.56 lakh metric tons (LMT) of wheat, benefiting 19.41 lakh farmers with a Minimum Support Price (MSP) value of Rs 52,394.66 crore, as assessed by OfBusiness. In this article, let’s delve into the progress of wheat procurement in India, the challenges faced, and the outlook for the future.

Current Scenario

• Momentum- The wheat procurement in India had slowed down for a few days, but it has regained momentum. The hope of increasing the purchase rate and adding to the government’s stock of wheat has increased.

• Quality & Production- According to agricultural experts, the heat did not have much adverse effect on the wheat crop during rabi season. Still, the quality of wheat was affected due to natural disasters such as stormy winds, heavy rains, and hailstorms in many areas from March 2023-April 2023. Fortunately, no significant decline in production has been reported.

• Procurement- The Ministry of Food has set a target of purchasing 34.15 million tons of wheat this year. The procurement has reached the final stage in Punjab, Haryana, and Madhya Pradesh, but the procurement is still far behind the target goal.

• Accomplished Target- Due to bad weather in Rajasthan, the arrival of wheat in markets has decreased. Therefore, wheat from Uttar Pradesh and Madhya Pradesh is reaching there instead. Procuring wheat at high prices by traders and millers makes it difficult to achieve procurement targets. However, the government’s procurement of wheat for this year has reached 41% of the target of 341.15 lakh metric tons by May 7.

Market Outlook

Over 24 million tons of wheat have been bought by the Food Corporation of India (FCI), exceeding the minimum amount of cereal stock required for India’s food security needs. The government will carry on buying wheat in an open-ended way, with a procurement estimation of 34 million tons in 2023. With well over 55 million tons of combined wheat and rice storage in state-owned granaries, the nation is in a secure position.

OFB’s Insight

Challenges such as bad weather in Rajasthan and procuring wheat at high prices by traders and millers make it difficult to achieve procurement targets. Despite these challenges, the government is optimistic and expects to achieve Ministry of Food’s target of procuring 34 million tons of wheat this year. With well over 55 million tons of combined wheat and rice storage in state-owned granaries, the nation is in a secure position. These developments are positive indicators for India’s food security and export prospects.

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