Wheat purchase by private buyers jumps to 6% in Punjab this year

Till Thursday, 101.50 lakh tonnes of wheat was sold in all mandis and private buyers had bought nearly 6% (5.98 lakh tonnes), highest in recent years

: As wheat procurement in Punjab begins to wind up from Thursday, private players this rabi season have witnessed a surge in the purchase of the crop at 6% of the total procurement in mandis as compared to its almost negligible share in recent years, giving the farmers an option to sell their produce at a price higher than the MSP.

Wheat purchase by private buyers jumps to 6% in Punjab this year (HT)

Till Thursday, 101.50 lakh tonnes of wheat was sold in all mandis and private buyers had bought nearly 6% (5.98 lakh tonnes), highest in recent years, according to Punjab Mandi Board (PMB) data.

Farmers switched to private buyers as the market was offering higher price than the minimum support price (MSP) of ₹2,015/quintal. The farmers have received up to ₹2,150/quintal from the private traders.

PMB general manager Sukhbir Singh Sodhi said in 2021, less than 7,000 tonne was bought by private parties across the state. It was only 24,991 tonnes in 2019.

“Until this year, non-government players had a negligible share in the purchase of wheat from Punjab mandis. But this year was exceptional and farmers had an option to sell their produce at higher prices,” said Sodhi.

Officials say Russia-Ukraine war was having a spill over effect on procurement in Punjab. The two countries are major suppliers of the food grains to non-wheat producing countries, particularly in the middle-east and due to the war, the entire export has been stopped forcing the importing nations to look for other options.

According to Naresh Ghai, president of wheat flour mills association, Punjab, “due to the Ukraine war, there is a sentiment among the traders and wheat processing units to store the raw material”.

Malwa leads in wheat procurement by private players

The Malwa region in the state led in wheat procurement by private layers at 71% of the total crop purchased by the traders.

According to data by the mandi board, 4.24 lakh tonnes wheat was purchased in all 14 districts of the Malwa region by private players followed by 1.28 lakh tonnes ( 22%) in Majha and 43,000 tonnes (7%) in four districts of Doaba belt.

Market watchers say that to earn a better remuneration from export orders in the coming weeks, traders are stocking wheat.

Mishal Singla, a roller flour mill owner from Mansa district, said presently farmers of Uttar Pradesh, the largest wheat-producing state, are making a beeline to sell their produce to private players, instead of government procurement agencies.

“UP farmers are being paid up to ₹2,200 per quintal and the scope for traders in Punjab and others states to earn from the export market may be revealed after one month. This time even the flour mill operators have enhanced stocks to not lose in case of domestic price surge later this year,” said Singla.

Districts with highest private purchase

Purchase data analysis of the current season says districts, known as hotbeds of farmer unions which are vocal against the role of the private players in mandi system, witnessed high sales to private entities.

This year, Sangrur led the sale of wheat grains to private players with 1.17 lakh tonnes followed by Ludhiana at 91,707 tonnes. Farmers of Amritsar sold 94,341 tonnes to private players, whereas 49,239-tonne wheat was purchased in Faridkot.

Pathankot, a key Majha region district, was the only district where private buyers failed to register any purchase. Entire production of 59,251 tonnes in the district was sold to the government agencies.

Six districts, namely- Jalandhar, Saheed Bhagat Singh Nagar, Muktsar, Moga, Barnala and Rupnagar- recorded less than 10,000-tonne purchase by the private parties.