Govt to offload wheat to bulk buyers, PDS to contain rotting

The government is likely to offload a part of its huge wheat stockpile in the open market and to states for subsidised sales to the poor, as much of the stockpile is likely to rot, as it does every monsoon, due to lack of storage facilities.

Reports suggest the government is seeking to offload about 13 million tonnes – 3 million tonnes to commercial biscuit makers and flour mills and another 10 million tonnes to states for distribution through the public distribution system (PDS) at cheap prices.

Grain stocks at government warehouses were at a record 82.4 million tonnes as of 1 June. With only 63.0 million tonnes of storage space, the rest has to be stored in the open, inviting rotting at the first rainfall. Authorities themselves admit that at least 6 million tonnes will rot; but unofficial estimates put the figure as high as 19 million tonnes. Grain is stored in the open across north India.

Food Minister K V Thomas said in an interview with Bloomberg on Thursday that a group of ministers will meet soon to consider the sale of about 13 million tonnes of wheat and rice to the poor and in the open market at subsidised rates, and discuss steps to boost exports to create room for newly harvested crops.

The government will immediately evacuate about 6.6 million tonnes of wheat kept in the open, enough to meet Japan's annual demand, Thomas said. Additional warehousing capacity of 15.1 million tonnes will be added in this financial year ending 31 March, he said.

A group of ministers will soon consider the sale of about 13 million tonnes of wheat and rice to the poor and in the open market at subsidised rates, and discuss steps to boost exports to create room for newly harvested crops, he said.