Wheat goes to private players in UP

In Uttar Pradesh, it seems, there are no takers for the government agencies as far as wheat collection is concerned.

In contrast to Punjab, private players are ruling the roost in Uttar Pradesh wheat mandis now. They have already bought a major chunk of wheat that is arriving at mandis.

Out of the 80,000 tonnes of wheat arrived till date, the Central and state agencies were able to procure only 2,717 tonnes.

In Punjab, out of the total 12,88,554 tonnes of wheat arrived in the state mandis up to April 15, about 10,45,243 tonnes (90.5%) has been procured by the government agencies only.

With this situation, Uttar Pradesh is unlikely to meet the wheat procurement target of 16.5 lakh tonnes. If things go at this pace, government agencies may be able to collect around 5 lakh tonnes of wheat this year.

So far the Central procurement agency FCI has been able to procure only 674 tonnes while state agencies have procured 2,043 tonnes of wheat in UP.

A good chunk of wheat is also finding its way to southern states where prices are good. Till date four to five rakes (one rake is equivalent to 2,400 tonnes) have been moved to south where prices are ruling above Rs 1,200 a quintal.

In eastern UP, the prices are hovering between Rs 1,050 and Rs 1,100 per quintal as arrivals have not yet started and old wheat is being sold.

Once arrivals start, prices may drop from these levels. In western UP the prices are ranged between Rs 850 and Rs 900.

Private companies like Adani, ITC, Cargill and Reliance are soon expected to enter the market directly. This may push up prices beyond Rs 900 a quintal.

FCI and the state government run 5,000 procurement centres in UP. However, farmers prefer to sell to private traders who are directly collecting the crop from them.

Poor infrastructure of government agencies adds to the low procurement of wheat. Of the 5,000 procurement centres, there are only 124 regulated mandis with proper yards.