At Punjab’s Rajpura mandi, non-public merchants are busy shopping for the wheat crop introduced in by farmers at marginally above the minimal assist worth (MSP). Traders have been super-active within the mandi, one of many largest centres of wheat commerce within the nation, and their day by day purchases typically exceed the official procurement by the state-run Food Corporation of India (FCI).
That is sort of uncommon for the state, the place authorities procurement has conventionally been probably the most sturdy within the nation and personal merchants used to have solely a marginal function.
At the state’s Khanna mandi, touted as Asia’s greatest grain market and likewise at Taraori in Haryana’s Karnal district, this reporter noticed comparable exuberance being exhibited by non-public merchants final week to beef up their wheat shares.
What explains the passion of personal merchants is a looming provide crunch of the grain, which they really feel will probably be in proof by July-August, given the havoc an early onset of summer season has performed on the ripening crops in the primary wheat-growing areas, together with Punjab, Haryana and Uttar Pradesh. The merchants anticipate that FCI, conscious of a decent inventory place, will doubtless chorus from its customary open market gross sales this yr.
A provide constraint couldn’t have come at a worse time for India, because the export marketplace for the grain is already booming and will stay so within the coming few months, owing to the Russia-Ukraine warfare which has altered the dynamics of worldwide wheat commerce. And Indian wheat is extremely aggressive globally.
Government functionaries have in current weeks been vocal about an unprecedented alternative to scale up India’s wheat exports within the present geopolitical context. Commerce and trade minister Piyush Goyal stated a number of days in the past that shipments of wheat by the nation “could even touch 15 million tonne (mt)” within the present yr, a lot increased than the preliminary goal of 10 mt and nearly double the extent seen final yr. As late as Saturday, finance minister Nirmala Sitharaman advised the media in Washington that the World Trade Organization (WTO) might loosen up its norms to facilitate export of wheat from India’s state granaries, given the availability scarcity being confronted by many nations.
But will India have sufficient wheat shares to ship out such massive portions of the grain?
This is how the figures stack up: The ‘opening stock’ of wheat with the federal government (FCI) stood at 19 mt on April 1, 2022, which, although a lot increased than the buffer requirement of seven.5 mt, was means decrease than the year-ago stage of 27.3 mt.
As on Sunday, official procurement of wheat within the present season stood at 12.67 mt, down by a 3rd on yr. Given this tempo and the suggestions from assorted market members, this yr’s procurement would at greatest be 25 mt, and may very well be even decrease at round half final yr’s purchases of 43.34 mt.
Supposing FCI will procure 25 mt of wheat this yr, its shares would rise to 44 mt. However, of the present shares, a sizeable amount of just about 10 mt was bought from Madhya Pradesh final yr and the majority of it’s understood to be of high quality that doesn’t conform to FCI’s specs as a result of lack of lustre. That leaves FCI with lower than 40 mt or so for PDS provides underneath the National Food Security Act and for the free ration scheme (PMGKAY), which has just lately been prolonged until September. NFSA provides require 26 mt of wheat and the PMGKAY requirement is in extra of 10 mt.
So, the availability state of affairs is actually grim. By the top of the yr, the FCI might even be struggling to maintain the buffer, not to mention intervene available in the market through open market gross sales to spice up the availability of grains. No surprise non-public merchants are stocking up now, eyeing the profitable export markets and serving to the mandi costs stay above the MSP.
Mandi arrivals of wheat in Punjab and Haryana peak over the last two weeks of April. As on final Wednesday, solely 67,000 tonne of grain was procured from farmers in Haryana’s Taraori mandi, together with purchases of 11,500 tonne by non-public merchants. “We are expecting another 5,000 tonne of grain to arrive in the market in the next couple of weeks before we wind up this year’s purchase session,” Pramjit Nandal, the official accountable for the market, stated. In 2021, greater than 0.1 million tonne of wheat was procured from this mandi. Under the scorching afternoon solar, a handful of farmers had been ready for his or her wheat crop to be cleaned by labourers.
About 200 km away, at Rajpura mandi in Punjab, round 56,000 tonne of wheat was procured by final Wednesday and precisely half the purchases had been finished by non-public merchants. A mandi official stated procurement on the mandi might lastly attain round 62,000 tonne in opposition to the 2021 stage of 96,000 tonne. “Currently, private players are buying wheat here at `2,020-2,030 per quintal against MSP of Rs 2,015 per quintal. Private traders were conspicuously absent here because of higher mandi taxes and other levies that account for 6.5-8.5% of the purchase cost,” the official added.
About 50 km away from Rajpura, in Khanna mandi, one of many greatest grain markets in Asia, out of 61,795 tonne of wheat procurement until Thursday, as a lot as 44,330 tonne was bought by non-public merchants.
“We have never seen so much interest of private trade in wheat procurement as in the past few days,” Mani Panjni, an official with Punjab’s division of meals and civil provides, stated. Private commerce earlier used to depend on the FCI’s open market sale scheme (OMSS), through which it uploads extra wheat shares available in the market after a procurement session is over. In 2021-22, FCI bought 7 mt of wheat underneath OMSS to bulk patrons.
Ajay Vir Jhakar, chairman, Bharat Krishak Samaj stated: “If the government does not intervene in the market (through stock holding limits), domestic wheat prices could cross Rs 2,500 per quintal in the next few months.” He, nonetheless, stated that PDS provides is probably not disrupted, even with the present stage of shares and manufacturing.
So far this season, FCI has bought 6.69 mt of wheat from Punjab mandis, on a par with final yr’s stage, whereas purchases in Haryana was simply 3.42 mt in opposition to 6.4 mt a yr in the past; In Uttar Pradesh, the purchases as on Sunday stood at a measly 68,000 tonnes, in opposition to the year-ago stage of 0.53 mt, whereas the procurement in Madhya Pradesh was 2.48 mt in opposition to 4.48 mt a yr in the past.
“Private players have stepped up wheat purchases because they fear that the OMSS may not happen this year because of a possible scenario of inadequate stock levels,” Siraj Hussain, former agriculture secretary, stated.
“The private trade is buying wheat in large quantities now because they sense an opportunity to export. Production hasn’t been impacted because of higher temperature in March,” GP Singh, director at Karnal-based Indian Institute of Wheat and Barley Research, stated.
Source: www.financialexpress.com”