Wheat Crisis Looms: Industry Leaders Urge Bold Action Amidst Import Warning 

INDUSTRY

Against the backdrop of projections nearing 795 million tonnes of global wheat production, the conclave focused on charting a course for innovation, sustainability, and strategic growth by 2030. Ajay Goyal, the Chairman of the Wheat Products Promotion Society, highlighted persistent challenges in meeting wheat procurement targets. He noted that both last year and this year, the wheat procurement targets were not met. For this year, the target was set at 36 million tonnes, but only around 26 million tonnes were procured. This shortfall underscores the urgent need for strategic interventions to enhance production and procurement efficiencies.

Ajay Goyal also expressed concerns about potential wheat shortages necessitating imports this year. He emphasized that the government lacks sufficient wheat stocks for effective market intervention. Current stocks are adequate for buffer purposes and various government programs but may not suffice for significant market interventions. Wheat stocks in India’s government warehouses as of May 1 were down by 10.3% year-on-year, marking their lowest levels since 2008. This decline follows two years of lower crops, prompting record sales to boost domestic supplies and reduce local prices. Looking ahead, Goyal cautioned that by August or September, if demand surpasses supply, the government may need to consider reducing import duties from the current 44% to zero to facilitate imports and stabilize prices in the market. Challenges arise after the harvest season, when wheat arrivals in the mandis (markets) stop. At this point, there is a reliance on the government to release stocks into the market to maintain supply stability. “In 2022, the government estimated a much higher crop and allowed exports. However, within a short span, they had to ban exports because the actual crop size on the ground didn’t match projections. We may be facing a similar hand-to-mouth situation this year,” Goyal remarked.

Goyal pointed out that market prices are currently 4-5% higher than the government’s minimum support price (MSP), whereas ideally, they should be 3-4% lower. He hinted at potential policy changes regarding wheat imports under a new government.