Confusion persists due to huge difference between government and commercial production estimates of wheat
05-Apr-2025 01:01 PM
New Delhi. The Union Agriculture Ministry has estimated the domestic production of wheat to increase by about 21 lakh tonnes from the record level of 1133 lakh tonnes in the 2023-24 season to an all-time high of 1154 lakh tonnes in the current Rabi season of 2024-25.
This estimate seems to indicate that the supply and availability of wheat in the domestic division will remain very smooth during the current year and its prices will remain under control. But past experience does not testify to this.
The government had estimated a record production of 1132.90 lakh tonnes of wheat in the 2023-24 season, but even then its arrival in the markets decreased and the price remained high.
There has been a ban on the export of wheat and its value-added products for a long time. The government had also imposed a storage limit on it, but still neither the supply increased nor the price decreased.
The situation became such that during December 2024 to February 2025, the government was forced to sell 30 lakh tonnes of wheat from its stock to the millers-processors. If 1133 lakh tonnes of wheat had been produced, then these additional measures would not have been needed.
Now once again the government has estimated a record domestic production of more than 1154 lakh tonnes of wheat, but the industry-trade sector is skeptical about it.
It says that wheat production may be slightly higher than last year but will be much less than the government estimate.
According to various entrepreneurs and business analysts, the actual production of wheat can be at most 1100 lakh tonnes and at least 980 lakh tonnes.
In this way, due to the huge difference in the government and trade production estimates of wheat, there is a dilemma in the market.
The government wants to increase the buffer stock by buying as much wheat as possible so that it can be able to effectively intervene in the market during the days of scarcity.
The target for wheat procurement has been set at 313 lakh tonnes which is 47 lakh tonnes more than the actual procurement of 266 lakh tonnes last year.
The government also has a previous stock of about 124 lakh tonnes which can ensure good availability of wheat in the central pool.
But there is a possibility of supply crisis increasing in the open market after June which can strengthen the prices again.
It will be important to see how much the government stock helps in increasing the supply of wheat in the domestic market.