With a 42% annual drop in wheat procurement by the government agencies to 16.19 million tonne (MT) as of May 1, stocks of the grain with the Food Corporation of India (FCI) have dropped to a five-year low of 31 MT on May 1.

According to sources, the current wheat stocks will barely meet the requirements under the National Food Security Act (NFSA) and Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), which has been extended till September 30, 2022.

While the government requires about 25-26 MT of wheat annually for the implementation of NFSA, another 10 MT of the grain is supplied to states under PMGKAY.

Sources said that because of the low stocks, the government is considering a proposal to substitute wheat provided under PMGKAY with rice, whose stocks are ample. As of May 1, FCI has 33.15 MT of rice while another 20 MT is receivable from the millers. This is against a buffer norm of 13.58 MT at the beginning of April.

The government had committed to supply 12.98 MT of rice under PMGKAY, but the supplies may be increased because of the low wheat stocks.

While wheat procurement is expected to be over in a week in the key growing states — Punjab, Haryana, Madhya Pradesh, Rajasthan and Uttar Pradesh –- the government agencies are struggling to achieve wheat procurement of 20 MT this season as arrivals in mandis have dropped significantly.

Due to private purchases by traders in anticipation of supply constraints in coming months and a surge in export opportunities, procurement in Punjab — the biggest contributor to the central pool — has declined to 8.86 MT from 10.89 MT last year.

In other key producing states such as Uttarakhand and Himachal Pradesh, wheat procurement has been rather sluggish so far.

The mandi prices across states are ruling at least Rs 200 to Rs 250 a quintal above the minimum support price (MSP) of Rs 2,015 a quintal announced by the government for this season.

According to an official statement by the government on Monday, 16.19 MT of wheat has been procured so far, by paying Rs 32,633 crore to the farmers.

This time, wheat procurement is being keenly watched as a surge in exports considering the disruption in global supplies over the Ukraine-Russia conflict has pushed up demand for wheat from India. While India is aiming at exporting more than 10 MT of wheat in 2022-23, given the lower level of procurement and stocks held with FCI, the government is likely to regulate exports to avoid domestic supply constraints.

Meanwhile, Railways has asked its divisional offices to provide rakes for food grains movement to FCI on a priority basis while capping rakes provided for transportation of wheat to ports for exports.