In anticipation of a shortfall in stock, due to over 16% of the annual drop in wheat procurement by agencies, the government on Tuesday revised grain allocation under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) from May to September 2022.
As per the revised guideline, during the remaining five months of phase VI of PMGKAY, the Food Corporation of India (FCI) will allocate 3.5 million tonne (MT) of wheat to states as per the earlier communication FCI was to supply 9 MT of grain.
Rice allocation during May-September, 2022, has been revised to 16 MT against the earlier norm of 10.8 MT. Launched in 2020 as part of the Covid-19 relief measure, under the PMGKAY scheme 5 kg of grains are provided free every month besides highly subsidised foodgrain to more than 81 beneficiaries under National Food Security Act.
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“To mitigate scarcity like situation and to ensure availability of sufficient stocks as per stocking norms, it has been decided to revise allocation during May-September 2022,” according to the food ministry’s communication to states.
This move to allocate more rice than wheat came after wheat stock held with FCI as of May 1 dropped to a five-year low of 31 MT on May 1.
Sources told FE that because of the low stocks, the government reduced wheat provided under the scheme with rice, whose stocks are ample. As of May 1, FCI has 33.15 MT of rice while another 20 MT is receivable from the millers. This is against a buffer norm of 13.58 MT at the beginning of April.
Wheat procurement is expected to be over in a week in the key growing states of Punjab, Haryana, Madhya Pradesh, Rajasthan and Uttar Pradesh. The government agencies are struggling to achieve wheat procurement of 20 MT this season as arrivals in mandis have dropped significantly.
The minimum selling price (MSP) of wheat stood at 16.8 MT on Monday, down by more than 42% from the year-ago level.
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Due to private purchases by the traders in anticipation of supply constraints in coming months and a surge in export opportunities, procurement in Punjab — the biggest contributor to the central pool — has declined to 9.05 MT from 11.47 MT last year.
The sharpest fall in wheat procurement this session has been in Uttar Pradesh, Haryana and Rajasthan. Uttar Pradesh state government has purchased just 0.15 MT of wheat so far, while it had procured 1.33 MT during the same period in 2021. In other key producing states such as Uttarakhand and Himachal Pradesh, wheat procurement has been rather sluggish so far.
The mandi prices across states are ruling at least Rs 200 to Rs 250 per quintal above the MSP of Rs 2,015 per quintal announced by the government for this season.
This time, wheat procurement is being keenly watched as a surge in exports considering the disruption in global supplies over the Ukraine-Russia conflict has pushed up demand for wheat from India.
While India is aiming at exporting more than 10 MT of wheat in 2022-23, given the lower level of procurement and stocks held with FCI, the government is likely to regulate exports to avoid domestic supply constraints.
