Date:26/04/2005 URL: http://www.thehindubusinessline.com/2005/04/26/stories/2005042600711000.htm

Back Lower arrivals of wheat reflect fall in production

Harish Damodaran

Khanna , April 25

THE best indicator of a not-so-bumper wheat crop this time is provided by data pertaining to market arrivals and procurement by official agencies.

As on Monday, a total quantity of 123.55 lakh tonnes (lt) have arrived in various mandis of the country during the ongoing 2005-06 rabi marketing season (April-June), which is below the 132.99-lt figure for the corresponding period of 2003-04. Moreover, progressive procurement by the Food Corporation of India (FCI) and State agencies has also been lower at 117.81 lt (127.15 lt).

At this rate, it looks that total wheat procurement for the Central pool during 2005-06 would end up being lower than not only the projected 180-lt, but even the 167.96-lt of the 2004-05 rabi marketing season. Prior to this, wheat procurement hit an all-time high of 206.30 lt during 2001-02, after which it fell to 190.55 lt and 158.01 lt in the 2002-03 and 2003-04 seasons.

During the current marketing season (till April 25), market arrivals have been lower compared to the corresponding position last year in Punjab (77.18 lt versus 80.94 lt), Haryana (38.46 lt versus 44.58 lt), Rajasthan (1.45 lt versus 2.60 lt) and Uttar Pradesh (66,731 tonnes versus 2.29 lt). A similar trend has been observed vis-a-vis procurement in Punjab (75.42 lt versus 78.97 lt), Haryana (38.18 lt versus 44.10 lt), Rajasthan (64,317 tonnes versus 1.43 lt) and UP (61,775 tonnes versus 1.60 lt).

The scenario of lower market arrivals and procurement is also borne out by ground-level observations by the trade. "Last year, wheat arrivals in our mandi totalled 10.75 lakh quintals. This year, it will just about touch 10 lakh quintals," said Mr Harbans Singh Rosha, Chairman, Marketing Committee of Khanna, which is considered to be Asia's largest grain mandi.

Traders here expect prices — now ruling at the minimum support price of Rs 640 a quintal — to hit Rs 700 a quintal by August.

An alternate view doing the rounds is that farmers are holding on to their crop in anticipation of prices firming up, which, in turn, is reflected in lower market arrivals.

But then, it is also true that few farmers are in a position to really stock up for a long period. "The underlying fact is that production is lower this time", said Mr Paramjit Singh, a local arhathia (commission agent).