Farmers sell wheat to govt as private takers peter out

NEW DELHI: It’s the end of the road for wheat farmers hoping to get high open market prices. Off-mandi prices have plummeted significantly across the North’s wheatlands as Rabi Marketing Season (RMS) 2007-08 winds its way into tailend weeks and private sector peters out. With all other options scrunched out, the wheat farmer has no recourse but to sell to the government at the minimum support price (MSP) of Rs 850/qtl.

With the food ministry having now stretched RMS from the usual end May to mid-June, key mandis in Punjab such as Khanna are reportedly brimming over with farmers offloading stored wheat in the government’s extended procurement season. Across Wheatland India, including UP, arrivals have improved drastically at mandis at this late stage in RMS.

The Centre’s wheat buys have been so good that flush with the success of its wheat import tenders strategy in forcing wheat out from the farmer, it is now looking at least at a healthy 11 million tonnes in buys this season. The good buys mean the Centre’s import needs have eased off to an extent despite repeated assertions that 5 million tonnes may well be imported.

In fact, it won’t need to import more than two million tonnes to make up stocks of four million at the end of the year unless it means to allow bigger US wheat imports and shore up extra stocks to insulate the country against inflation shocks next April. Significantly, big arrivals at this late stage of RMS, along with nosediving open market prices, underscore the lack of private sector interest in the commodity.

Take a peek

At the plummeting open market prices in the two key procurement states of Punjab and Haryana, open market prices ruled at Rs 880/qtl and Rs 900/qtl compared to FCI’s Rs 850/qtl in April this year.

By Monday, open market prices had zoomed down to Rs 860/qtl and Rs 870/qtl respectively. But there are no private sector takers for the wheat offered any more. Daily arrivals at mandis in the two states by Monday stood at a whopping 12,193 tonnes and 17,749 tonnes, respectively.