Indian wheat procurement gains pace, jumps above last year's buying

Higher procurement will help India bring down wheat prices, which jumped to a record high earlier this year and lifted food inflation

The Indian state has procured more wheat so far in the current marketing year than total purchases made in the previous year, two government officials said on Friday.

Higher procurement will help the world's second-biggest wheat producer bring down wheat prices, which jumped to a record high earlier this year and lifted food inflation.

Wheat procurement jumped to 19.5 million tonnes as of April 26th, above the more than 18.8 million tonnes procured last year, said a senior government official who declined to be named.

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"Procurement has gained momentum in the last few days," the official said.

Rain and hail in March and April damaged India's wheat crop just before harvesting, forcing the government to ease procurement norms to rebuild stocks and help farmers, who were getting lower prices on the open market for the damaged crop.

In all, India plans to buy 34.15 million tonnes of new-season wheat from local farmers.

In the first half of April procurement gained momentum in central state of Madhya Pradesh, while in the second half of this month, the northern states of Punjab and Haryana contributed significantly, said another government official.

Farmers have been selling damaged wheat to state-run procurement agencies and their good quality crop to private players, said a New Delhi-based dealer with a global trade house.

"It seems at the current pace, government procurement can reach 30 million tonnes. That would be enough for the government to run welfare schemes but won't allow it to lift a ban on the exports," the dealer said.

India, also the world's second-biggest consumer of wheat, banned wheat exports in May 2022 after a sharp, sudden rise in temperatures clipped output, even as export demand picked up to meet the global shortfall triggered by the Russia-Ukraine conflict.