Though wheat procurement by government agencies such as the Food Corporation of India (FCI) is 23 per cent lower so far, there is no cause for concern as harvest has been delayed in key growing States such as Punjab and Haryana this year.

Wheat procurement for the current season, which began on April 1, was 41.69 lakh tonnes (lt) as of April 16 compared with 54.41 lt in the corresponding period a year ago. Due to delayed harvesting in Punjab and Haryana, procurement is likely to recover in the coming weeks. The procurement in Madhya Pradesh and Uttar Pradesh is much higher than the year-ago level.

“Harvesting started late this year due to unseasonal rains. As the crop has dried in the fields now, reducing the moisture level to normal in most places, arrivals will improve from now on,” said Naresh Ghai, former president of the Punjab Roller Flour Millers’ Association. There is no cause for concern, and the overall targeted procurement will not be affected, he said.

The Centre has estimated the likely procurement of wheat at 341.5 lt this year, which includes 132 lt from Punjab, 75 lt from Haryana, 80 lt from Madhya Pradesh, and 35 lt from Uttar Pradesh.

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The current procurement in MP is up by 159 per cent at 23.28 lt, while UP has reported a 59 per cent increase at 41,575 tonnes as of March 16 from a year ago, official data show. On the other hand, procurement in Punjab is down 57 per cent at 10.75 lt and Haryana reported purchases at 7.2 lt, down by 65 per cent. Total arrivals of wheat at procurement centres is so far at 91.94 lt.

“One of the concerns in Punjab and Haryana is the lower quantity of purchases from the volume that comes to procurement centres. However, field staff have conveyed that the situation will improve once the crop has a normal moisture level,” said a government official.

Data show that as much as 47 per cent of the arrivals in Punjab have been procured for the Central Pool stock, compared with 69 per cent a year ago. Similarly, it is 26 per cent against 63 per cent in Haryana and 12 per cent against 35 per cent in UP. But it is just reversed in the case of MP, as 66 per cent got purchased against 33 per cent a year ago.

Relaxed norms

Due to higher export demand and shrivelled grains last year, the government procured about 188 lt of wheat against a target of 444 lt. It resulted in wheat prices rising to over ₹30/kg at the mandi level, prompting the government to sale 50 lt in the open market. Finally, prices were brought down below the minimum support price (MSP) level.

As many as 4.03 lakh farmers have benefitted from the ongoing procurement operations, but it is not clear how much quantity has been purchased under relaxed norms. Since the value cut imposed by the Centre against certain relaxed norms will be compensated to farmers by state governments in Punjab and Haryana, farmers will receive the full MSP of ₹2,125/quintal and as much as ₹8,859.21 crore outgo is estimated for the quantity purchased so far.

Meanwhile, traders said some companies in UP are buying wheat at ₹2,300/quintal, whereas the average mandi price is hovering around MSP. “Prices were higher than MSP until a few days ago, but have now reached around ₹2,100/quintal,” said a trader in Hapur mandi. Though the demand from millers and processors is not like last year, it is not bad either,” he added.

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