Private traders to double wheat purchase in Punjab this year

By Ruchika M Khanna

The depleting foodgrain stock with the Government of India may see the private purchase of wheat finally taking off from mandis when the wheat procurement starts by the end of this week.

For years, the private purchase of wheat from the mandis is bare minimum and over 95 per cent stock is bought by government agencies. But this year, with the foodgrain stock of the Centre hovering close to the minimum buffer stock limit and there is apprehension that the stock to be auctioned through the OMSS will not be sufficient to meet the private traders’ demand, private buyers are expected to participate “enthusiastically” in the wheat purchase.

Secretary, Food and Supplies, Punjab, Vikas Garg, said as compared to 4.50 lakh metric tonnes of wheat purchased by private traders, we expect it to go up to 10 lakh metric tonnes. “Our field reports suggest that big food companies have approached commission agents in many mandis, asking them to buy large quantities of wheat on their behalf,” he said.

A bumper harvest is expected this year. This comes after two years of low wheat production, which has dwindled the wheat stock in the Central pool to 9.7 million tonnes as on March.

A commission agent in Rajpura said big food processing units had approached agents in Kapurthala, Amritsar and Bathinda districts and asked them to buy wheat in a bulk quantity. “The farmers might get Rs 25-30 per quintal over and above the MSP of Rs 2,275 per quintal from the private players,” he said.

Naresh Ghai, president of the Punjab Roller Mills Association, said though they would buy more wheat from the mandis this year to pile up their stocks, they hoped that the state government would reduce the taxes (Rural Development Fund and market fee of 3 per cent) on them, and make it on a par with the taxes imposed in other states.

“It is because of the higher taxes that private players have abstained from buying from Punjab, which cost them Rs 2,400 per quintal. Already, under the Open Market Sale Scheme of the Government of India, the reserve price of wheat, across the country, has been fixed at Rs 2,300 per quintal. That is why flour mills owners buy the stocks when the OMSS auction of stocks is done by the Centre, or from neighbouring states where taxes are low. But because of the low wheat stock with the Centre now, there is apprehension that the stock to be auctioned through the OMSS will not be sufficient to meet our demand. Thus, we will buy wheat from the mandis now,” he said.

This article has been republished from The Tribune.