NEW DELHI, INDIA — India continues to bolster its wheat stockpiles as its purchases from local farmers rose 13% from the previous year’s procurement, Reuters reported on June 30.
Government granaries are running out of storage space due to more than a decade of bountiful production, Reuters reported.
Government-backed Food Corporation of India (FCI), which buys grain from farmers at a state-set guaranteed price, has bought a record 38.83 million tonnes of wheat, a government statement showed. Last year, the FCI procured 34.13 million tonnes of wheat.
“It now looks like that we’ll end up buying 40.5 million to 41 million tonnes this year,” an official who oversees the government’s wheat purchase program, declining to be identified in line with government policy, told Reuters.
While the annual increase in the guaranteed price has led to overflowing bins, the same policy has pushed Indian wheat prices about $35 a tonne above world market prices, making it almost impossible for India to export the grain.
This year’s domestic wheat output is widely expected to reach 107.18 million tonnes, versus 103.60 million tonnes produced in the previous year.
Private traders have mostly stayed away from buying wheat from farmers due to lockdown measures aimed at stemming the spread of the new coronavirus, forcing the FCI to scoop up record quantities of wheat, according to Reuters.
Amit Takkar, chief of brokerage Conifer Commodities, last month told Reuters that if the FCI ends up buying more than 37 million to 40 million tonnes of wheat this year, its granaries will overflow by June.