Wheat stocks at three-year-low, but comfortable

The Union Agriculture Ministry has projected wheat production at a record 111.32 mt, although there could be a downward revision due to an earlier-than-usual onset of summer that is seen to have impacted grain yields. A clearer picture would emerge once harvesting and procurement of the crop picks up after mid-April.

Stocks in Central pool as on April 1 (Lakh tonnes)

*Includes rice equivalent of un-milled paddy;**Operational stocks plus strategic reserve. Source: Food Corporation of India.

The decline in wheat stocks has taken place mainly on the back of all-time-high offtake from the public distribution system, especially under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) scheme launched post the Covid-19 pandemic. Total wheat offtake, which was only 27.19 mt in 2019-20, soared to 36.39 mt in 2020-21 and further to 46.46 mt during the first 11 months (April-February) of 2021-22. PMGKAY (which entitles existing ration card holders to an extra 5 kg grain per person per month free of cost) alone accounted for 10.35 mt offtake in 2020-21 and 18.49 mt in April-February 2021-22.

Rice stocks, on the other hand, were at a record 55.04 mt as of April 1. The reason for higher stocks has been procurement exceeding offtake. Government agencies purchased about 61 mt of rice during April-February 2021-22, which was more than the corresponding aggregate offtake of 50.15 mt (including 20.56 mt under PMGKAY). As against this, wheat procurement, at 43.34 mt, was below the offtake of 36.39 mt during April-February 2021-22.

Government wheat purchases are likely to be lower in the new marketing season because of export demand, which has resulted in open market rates ruling above the minimum support price of Rs 2,015 per quintal in most mandis. Wheat exports from India hit a record high of 7.85 mt in 2021-22 and are expected to top 10 mt in the current fiscal. That could lead to a further depletion of stocks, which are, however, at comfortable levels as of now.