As wheat harvest across key growing regions in North India almost comes to an end, procurement agencies and the private trade have to contend with discoloured grains this year.
The unseasonal rain that lashed a month ago damaged not only the standing crop across several States but also impacted the quality of the grain leading to lustre loss.
While the pace of procurement by the state agencies has gathered momentum, the availability of quality wheat has become an issue for the private trade, mainly millers.
As of May 1, the wheat procurement by the state and Central agencies exceeded 18 million tonnes (mt), with Punjab and Haryana accounting for most of the purchases at over 7 mt and 5.67 mt respectively. In Madhya Pradesh, the procurement was 4.54 mt, followed by Rajasthan at 5.33 lakh tonnes and Uttar Pradesh at 4.23 lakh tonnes.
Quality hit Compared to last year, the trend in procurement was a bit sluggish this year, mainly due to delayed harvest, even though the Government has relaxed the norms for the purchases in view of the damage to the crop.
“The quality of wheat that’s arriving in markets across Madhya Pradesh, Uttar Pradesh, Punjab and Haryana is bad. It is not fit for making maida . We are struggling to get quality wheat this year,” said Adi Narayan Gupta, a Delhi-based miller and former President of the Roller Flour Millers’ Federation of India.
While the market arrivals are lower than normal this year, the Food Corporation of India has stopped open market sales, a trend practiced during every procurement season.
“We will wait for some more time and if the availability of quality wheat does not improve, we may have to go in for imports,” Gupta said.
Australian imports Staring at a quality loss in wheat, millers mainly in South India have already begun contracting imports of the high protein wheat from Australia. “About 7-8 vessels of 25,000 tonnes each have already been contracted by importers in the country, from whom we plan to purchase,” said Pramod Kumar, Executive Director of Bangalore-based Sunil Agro Foods Ltd.
With millers in North India also exploring options to import, trade sources expect the cereal inflow to be around 5-8 lakh tonnes this year.
The trade expects a 10-20 per cent crop loss this year on rain damage. The lustre-less wheat that's coming into the market is being absorbed, while prices are moving up slowly. In most of the markets, quality wheat is hovering around the minimum support price levels of ₹1,450 a quintal.
Traders expect wheat prices to firm up the moment arrivals slow down. The Government, in its second advanced estimates, had pegged the wheat crop size at 95.7 mt, but is yet to come up with revised estimates.
“We have been able to source some good wheat from the Jabalpur area in MP and around Allahabad in UP,” said MK Dattaraj, Managing Director, Krishna Flour Mills.
Protein content
The Bangalore-based miller has also contracted some Australian wheat for June shipment delivery in July.
“Though appearance of the grain is an issue this year, it is not very bad. It is perfectly okay for consumption,” said Indu Sharma, Director, Indian Institute of Wheat and Barley Research, estimating the overall losses to be in the range of 10-15 per cent.
Also, the rising temperature levels have helped address the issue of high moisture content. The moisture level is down to around 12 per cent as against earlier 14 per cent. Sharma said the size of the grain also appears to be smaller in some areas, though it would not affect the protein content.
Food Minister Ram Vilas Paswan had recently informed Lok Sabha that the wheat procurement may fall short of the initial target of 30 million tonnes due to crop damage following the recent unseasonal rain.
Punjab’s share has been fixed at 12 mt, Haryana 7 mt, Madhya Pradesh 6 mt and Uttar Pradesh 3 mt. The Government had procured 28 mt of wheat last year.