Decline in arrival of wheat has also resulted in shortfall in its procurement this season by the official agency Food Corporation of India (FCI), Food ministry sources said here even as the government maintains that there “will not be any shortage” of the commodity.
“Last year’s procurement of wheat was at about 31 million tonnes, this year there is a marginal decline to 25.6 million tonnes due to low arrival,” a ministry source said here, adding bulk procurement is completed generally between April and June.
The domestic production has suffered this year due to drought and long dry spell in several parts of the country.
“However, with the Food Corporation of India (FCI) having adequate stock there should not be any shortage,” a senior Food Ministry official told.
The government’s confidence about no shortage comes from the fact that initially the government had proposed a buffer stock of only 27.7 million tonnes as on July 2016.
In view of the lower procurement, the government has reduced the quantity of wheat to be sold under Open Market Sale Scheme (OMSS) in 2016-17, the source said.
The government has also meanwhile decided to further extend 25 per cent import duty on wheat to curb inward shipments.
Government sources said private traders have so far imported 5 lakh tonnes of wheat. Australia and France are two principal providers of imported wheat to India this year.
Market estimates say the millers have bought a total 350,000 tonnes of Australian wheat and the remaining 150,000 tonnes came from France.
The central government had first imposed a 10 per cent duty in August 2015 and then increased it to 25 per cent in October last year on the pretext of decline in global prices and adverse impact on domestic growers.
India is otherwise world’s second-biggest producer of wheat.