India's Wheat Procurement Strategy: Can Increased Targets and Export Quotas Stabilize the Market?
Decoding govt’s wheat strategy: Can higher procurement push and export quota hike lift the sector?
The Economic TimesImage: The Economic Times
The Indian government has raised its wheat procurement target by 15% to 34.5 million tonnes and approved an additional 2.5 million tonnes for export to manage surplus and support farmer incomes. However, industry experts caution that storage limitations and high domestic prices may hinder effective surplus management, leading to potential market interventions.
- 01The wheat procurement target has been increased to 34.5 million tonnes.
- 02An additional 2.5 million tonnes of wheat is approved for export, raising the total quota to 5 million tonnes.
- 03Storage capacity constraints may limit procurement effectiveness and lead to surplus stocks.
- 04Wheat prices are unlikely to rise significantly due to high existing stocks and limited storage.
- 05Export competitiveness remains a challenge due to higher domestic prices compared to global markets.
Advertisement
In-Article Ad
The Indian government has increased its wheat procurement target by 15% to 34.5 million tonnes to support farmers and manage surplus amid high production levels. With expectations of wheat output reaching 110-120 million tonnes for the 2025-26 season, the government aims to ease stock pressure by approving an additional 2.5 million tonnes for export, bringing the total export quota to 5 million tonnes. However, industry experts express concerns regarding the effectiveness of these measures, citing limited storage capacity and high domestic prices that make Indian wheat less competitive globally. Currently, the Food Corporation of India (FCI) holds a stock of 60.40 million tonnes, with only 34.82 million tonnes of space available for new procurement, which could lead to surplus stocks of 30-35 million tonnes by the end of the next season. Stakeholders indicate that without a clear disposal plan for surplus stocks, market interventions may be necessary, likely through the Open Market Sale Scheme (OMSS). Despite the government's efforts, trade sentiment remains cautious as processors and traders are reluctant to build inventories at elevated prices. The minimum support price (MSP) for wheat has been set at ₹2,585 per quintal, up from ₹2,425 last year, but current mandi prices hover around ₹2,300-2,400 per quintal. Overall, while the government's strategy aims to stabilize the wheat market, significant challenges remain in achieving effective surplus management and export competitiveness.
Advertisement
In-Article Ad
The increased procurement target and export quotas aim to stabilize wheat prices and support farmers, but storage limitations could lead to market interventions, affecting prices and availability for consumers.
Advertisement
In-Article Ad
Reader Poll
Do you think the government's wheat procurement strategy will stabilize prices effectively?
Connecting to poll...
More about Food Corporation of India
Read the original article
Visit the source for the complete story.




