DelhiDesk India’s Food Corp will miss its wheat procurement target of 34.5m tonnes in the April-March Rabi marketing season for 2023-24 due to farmers holding back their produce and private traders stocking up. The agency’s chairman and managing director, Ashok Meena, said the Food Corp will be able to procure just 26m tonnes of wheat this season. Farmers in some states are selling their wheat crops to traders, millers and stockists due to higher market prices. Last year, wheat prices hit a record high and continued soaring until the government in January came up with a system to release grains into the open market.

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๐Ÿ‘‰ Food Corp India will miss the wheat procurement target of 34.5 million tonnes during the 2023-24 April-March Rabi marketing season.

๐Ÿ‘‰ Private traders and farmers holding back their produce are the main reason for this.

๐Ÿ‘‰ FCIโ€™s chairman and managing director Ashok Meena said that the agency will be able to procure only around 26 million tonnes of wheat this season.

๐Ÿ‘‰ Farmers in states like Uttar Pradesh and Bihar are keener to sell their wheat crops to traders due to higher market prices.

๐Ÿ‘‰ FCI is procuring wheat at the minimum support price of 2,125 a quintal.

๐Ÿ‘‰ Some farmers across the country are holding back their produce hoping for last year’s prices.

๐Ÿ‘‰ Farmers are refraining from selling only inferior-quality wheat which was not accepted for procurement as per FCI’s norms.

๐Ÿ‘‰ Industrial consumers are stocking up for 1.5-2 months on average for operational purposes.

๐Ÿ‘‰ The government requirement for the (subsidised) public distribution system is 18.5 MT and buffer requirement is 7.5 MT.

๐Ÿ‘‰ A 10% increase in wheat prices leads to almost 30bps increase in headline inflation.

๐Ÿ‘‰ Retail and wholesale inflation readings are expected to print lower in the coming months.

๐Ÿ‘‰ Any spikes in cereal inflation amid El Nino predictions could derail the disinflationary trend and have second round impacts on inflation.

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