MSP vs market reality: Pvt traders shun Punjab mandis, buy cheaper wheat from states
By Ruchika Khanna
Private traders and flour mill owners in Punjab are not buying much wheat from the state mandis this year. Only 0.22 per cent of the total wheat procured to date has been bought by private traders and flour mill owners.
In 2025, private traders purchased 8.30 per cent of the total wheat, while in 2024, they bought 5.72 per cent of the grain. In 2023, only 3.68 per cent was purchased by private traders, much less than 6.01 per cent purchased by them in 2022. It may be mentioned that the annual wheat requirement by flour mills and atta chakkis in the state is around 16.50 lakh metric tonne (LMT).
Dwindling pvt participationYear Total purchase Private purchase
2022 102.61 LMT 6.17 LMT
2023 125.76 LMT 4.64 LMT
2024 132.13 LMT 7.56 LMT
2025 129.99 LMT 10.80 LMT
2026 67.34 LMT* 15,340.65 MT*
*To Date
To date, 71.58 LMT of wheat has arrived in mandis, of which 67.34 LMT has already been procured. This includes 15,340.65 MT procured by private traders, while over 99 per cent has been purchased by government agencies. ‘We were not seeing any significant participation from private traders till two days ago. This may be because these traders preferred to buy wheat from other states, where the minimum support price regime is not in place,” Mahinder Krishan Chand Arora, a commission agent in Rajpura told The Tribune.
In Khanna, Harbans Singh Rosha, said private participation in wheat purchase had increased marginally over the past two days, but it would still not be of the same level as in the past few years. “Earlier, big agricultural corporates too would participate in the wheat purchase. But this time, only flour mill and atta chakki owners have now starting buying miniscule quantities of wheat, which at the end of the season may still remain below two percent,” he said.
Flour mill owners told The Tribune that they had already bought requisite stocks from Uttar Pradesh, Rajasthan and Madhya Pradesh, from where their landing cost of wheat works out to be Rs 2,550 per quintal. “The MSP of wheat is Rs 2,585 per quintal, but by including all incidental costs, we pay Rs 2,695 per quintal. Thus private traders this year have been buying more from other states, or will wait for the FCI to launch its Open Market Sale Scheme (OMSS) for wheat.In the last OMSS auction, private mills got wheat for Rs 2,550 per quintal,” said Naresh Ghai, president, Punjab Roller Flour Mills Association. He, however, said now because of fall in wheat production in the other states, the prices there have started increasing, so the Punjab flour mills will now buy whatever little is required now, from Punjab mandis, though total private purchase will remain at around 1.50 per cent only.
This article has been republished from The tribune.