EXCHANGE RATE-Cost of Devaluation

To What Avail?
THERE have been some funny goings-on in the wheat market. Till the other day, in fact till the end of the rabi marketing season from April to June, reports were of distinctly weak market sentiment. This, it was thought, had enabled the government procurement agencies to buy up as much as 12.56 mn tonnes of wheat in the marketing season, which was 3.27 mn tonnes more than last year even though the 1997-98 wheat crop at 66.38 mn tonnes was almost 3 mn tonnes smaller than the production of 69.27 mn tonnes in 1996-97. No doubt the whopping procurement price of Rs 510 per quintal, including the so-called bonus of Rs 55 per quintal, played its part, but evidently the government agencies faced no competition from traders who were virtually absent from the mandis during the entire marketing season. From the figures which have been released it would appear that government agencies bought over 90 per cent of all mandi arrivals of wheat, What is more, this was the case not just this year. In previous years as well the share of purchases by the government agencies in total mandi arrivals has been over 80 per cent. Clearly some interesting changes have been taking place in the foodgrains markets, in the wheat market at any rate, which deserve rather more attention than they have received.