E-Paper
Punjab: At 2.6%, wheat purchase by private players belies hopes
With Ukraine and Russia — two major wheat exports worldwide — locked in a war, it was being expected that India will witness an upswing in crop purchases by private players.
Against the Punjab food and civil supplies department’s expectations of private players purchasing a considerable share of freshly harvested wheat crop as the rabi procurement season began on April 1, the trends in the first week are not too encouraging.
With Ukraine and Russia — two major wheat exports worldwide — locked in a bloody war, it was being expected that India — particularly its main wheat-producing states of Madhya Pradesh, Uttar Pradesh, Rajasthan and Punjab — will witness an upswing in crop purchases by private players.
However, figures released by the Punjab food department tell a different story. According to the procurement data released till April 7, of the total wheat arrival of 42,589 tonnes to the purchase centres, only 1,108 tonnes have been bought by traders. It comes to a paltry 2.6%.
It’s wait and watch
The wheat prices in the open market have touched ₹2,300 per quintal against the minimum support price of ₹2,015 fixed by the Centre. However, a section of affluent farmers is planning to hold the stocks to be sold in the market once the price rises further.
“I am planning to hold stocks as we are expecting the wheat prices to rise in the open market in the next two-three months,” said Nek Singh, a farmer from Khokh village in Patiala district. Gunbir Singh Sodhi, a farmer from Ferozepur, said: “I might hold a portion of the crop for sale in future. Let’s see how the market behaves in the days to come.”
The state food department has made arrangements for procurement of 132 lakh tonnes of wheat against an expected production of about 175 lakh tonnes. The department as well as traders had earlier pegged the wheat sale in open market to touch 10-20% of the total arrivals. However, now they say it’s a wait and watch scenario.
‘Focus on other states’
“Currently, the focus of traders is on Madhya Pradesh, Uttar Pradesh, Gujarat and Rajasthan, which are logistically closer to the Kandla port (Gujarat). They will turn towards Punjab if they are unable to pick sufficient stocks from these states. No doubt, we are expecting private purchases for consumption of wheat flour in the country too,” said a food department officer.
Naresh Ghai, president of the wheat flour mills association, confirmed that mostly local traders are purchasing wheat for local consumption, while bigger players are keeping away so far due to high logistical cost in moving the crop to the port for exports.
Notably, the Food Corporation of India (FCI) — the central agency that drives nationwide food distribution for 80 crore beneficiaries — has asked wheat-producing states to explore the opportunities for exports in the wake of global shortfall due to the Ukraine-Russia war.
FCI chairman-cum-managing director Atish Chandra is visiting Punjab and Haryana these days to supervise wheat procurement arrangements. He has asked the states to boost private trade by waiving levies and taxes. The matter, according to a state department official, is still being brainstormed and there is no decision.
“Punjab has the scope to export wheat only if the Attari-Wagah border with Pakistan is opened for international trade. In that case, Afghanistan, Iran and Middle East countries can be tapped,” said the official cited above.
