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Where is the wheat? Only farmers know
Commodity Online
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April 24, 2007 11:03 IST

Where has all the wheat gone? Blame it on the smart farmers in Punjab.

Ingenious farmers in Punjab have decided to hold on to their wheat till the market is ready to offer them better prices.

This move by the ryots may upset the procurement targets of agencies like the Food Corporation of India.

According to officials and traders, several dealers from Rajasthan, Madhya Pradesh and Uttar Pradesh have given the farmers an offer that their stock will be lifted at a better price 3-4 months later. Last year also farmers were given such offers by traders and they were given higher prices.

After getting better prices last year, the farmers are not ready to part with their wheat this year as they expect the prices to go up in a few months' time.

In fact, several farmers have already signed agreements with traders from neighbouring states in this regard.

In Khanna and Jagraon mandis in Punjab, wheat arrival so far has been quite slow. Keeping this in consideration the procurement of wheat may have to be prolonged.

FCI officials, on the other hand, are maintaining that hoarding is not that widespread.

The production can be 4 million tonne more across the nation as compared to last year. FCI officials don't think hoarding of wheat by farmers will hit procurement targets.

According to FCI officials, arrival is slow as the crop is still in the fields. FCI is still hopeful of surpassing the procurement target as compared to last year.

Private procurement companies last year had paid MSP as high as Rs 1,170 per quintal during November and December. Only this time it is the private traders from neighbouring states and not the companies which are encouraging hoarding.

Earlier, FCI chairman Alok Sinha had said that procurement can go up to 2 crore (20 million) tonne across the nation. Last year FCI had procured 1.60 crore (16 million) tonne of wheat.

Prices go up in Rajasthan

In Jaipur, wheat prices have gone up at mandis in Rajasthan following a slump in arrivals.

According to traders, farmers are holding back their stock in anticipation of better deal later this month. Again, due to Aakhateej festival, the arrivals are only 20% of the total marketable wheat in the state.

Traders said arrivals from Madhya Pradesh (around 3,000 quintals at Rs 1,250 a quintal) are making up for the slump in Rajasthan.

Around 10,000 quintals of wheat is hitting the Jaipur mandi of which good quality grains are getting Rs 950-1,450 a quintal.

In Kota, private companies, including ITC, Cargill, Australian Wheat Board and Adani, have started filling their warehouses. The arrivals have slowed down here with around 10,000-15,000 quintals hitting the mandi daily.

Earlier, there were heavy arrivals from neighbouring villages (50,000 quintals a day). Most of the farmers are selling their produce through chaupals to ITC where they save on transportation charges. The rates range from Rs 960-1,150.

According agriculture department officials, the total produce of wheat in the state has touched 75 lakh (7.5 million) tonne out of which 5.5 lakh (550,000) tonne is likely to hit the mandis.

But with the kind of rates prevailing in Jaipur-Kota mandis, Food Corporation of India has been left with very little choice. FCI has started procuring wheat from Alwar, Bharatpur, Hanumangarh and Sri Ganganagar mandis. The corporation has till date procured 1,500 tonne of wheat against the targeted 200,000 tonne.

The influence of corporate players is limited to Kota region where they get direct connectivity for transportation. They don't go to mandis of Sri Ganga Nagar, Hanumangarh, Jaipur and Bharatpur as transportation charges would squeeze the profit margin.




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