Wheat purchase falls short by 4.5 mt

More buying by wheat-based industries, lower output seen as reasons

Higher purchases by wheat-based industry and trade coupled with relatively lower crop yields in Punjab and Haryana and withholding of stocks by large farmers have caused a shortfall of nearly 4.5 million tonne in wheat procurement so far this year. The industry and the farmers foresee the wheat prices to remain firm this year.

Total wheat procurement till today is estimated at a little under 9 million tonne, against 13.5 million tonne last year. Overall market arrivals of wheat, too, are down this year to 12 million tonne from 14.3 million tonne in the corresponding period last year.

The wheat industry and traders have already bought over 3 million tonne from the regular mandis, including about a million tonne in Punjab and about 7 lakh tonne in Haryana. In other wheat growing states, almost all the stocks are being mopped up by the private trade. Substantial quantities of wheat are reported to have been transacted outside the mandis (to save on taxes). The precise estimate of such trade is not available as it goes unrecorded.

The trade circles point out that the wheat industry does not expect to get subsidised wheat from the government stocks and was, therefore, stocking up to meet their requirements. The private trade was seldom so active in the wheat market in the past.

However, the procurement season is not over yet as more than 2 lakh tonne of wheat is still coming to mandis every day. But the last year's total wheat procurement level of 14.7 million tonne is likely to be missed by a large margin. Wheat procurement and production scenario was reviewed at a meeting in Ludhiana today by the Punjab agriculture extension officials and the experts of the Punjab Agricultural University (PAU). It was generally felt that the average yields in most of the districts of the state were down by 8 to 10 per cent this year due to unfavourable weather. The worst hit was the Malwa belt, especially the central districts.

The yield reduction was attributed to frost and undue cold in the middle of February which hit the early sown crop the most. The rise in temperature in early March, though followed by rains and drop in temperature in mid-March, was also deemed to have adversely affected the crop. Besides, the inclement weather, marked by squalls, towards the end of March discouraged the farmers from providing the last irrigation to the crop for fear of lodging (falling down of plants), contributing to the lower yield.

Since the weather pattern remained almost similar in Haryana, the wheat yields are also feared to have been adversely affected there. The crop output in Madhya Pradesh is down this year as wheat could not be planted over about 6 lakh hectares because of paucity of soil moisture. Output fall is held responsible for relatively high prices of wheat, especial that of good quality wheat used generally for making pasta products. Reports from Punjab indicate that large farmers are unwilling to sell to government agencies as they were dissatisfied with even the raised procurement price of Rs 700 a quintal when the government was willing to import wheat at higher landed cost. They were either selling to the private parties outside the mandis or holding on to their produce.

According to the latest information available with the Food Corporation of India (FCI) control room here, Punjab mandis have received 7.7 million tonne of wheat till today, of which the public agencies bought about 6.7 million tonne and the trade about 1 million tonne. In Haryana, of the total arrival of 2.8 million tonne of wheat, the government procured about 2.2 million tonne and the trade about 6 lakh tonne. Elsewhere, the procurement is very little as the private trade is mopping up most of the stocks at prices higher than the support price of Rs 700 a quintal (including Rs 50 bonus).

The average prices (in Rs per quintal) in the mandis of major wheat producing states today were as follows: Punjab 700 to 755, Haryana 700 to 841, Utter Pradesh 700 to 850, Rajasthan 700 to 994 and Madhya Pradesh 702 to 1231.