DELHI (Commoditiescontrol) - Proposed relaxation in quality standards for wheat may give much needed respite to farmers in the country after the recent setback in weather that caused heavy losses to quantity and quality. Such relaxations already pulled up prices in Madhya Pradesh and Gujarat.
Central government is working towards relaxing quality norms for other producing states also. But traders say that such move can provide relief to farmers only when rules are formulated carefully. Wheat supply will begin in Uttar Pradesh, Punjab and Haryana within one or two weeks.
Yesterday, the government has announced that it is thinking over relaxing norms for wheat procurement, in the wake of damages caused to the quality of the grain by untimely rains. Various reports have acknowledged damages such as high moisture content and quality of grains to standing crop of wheat in the growing regions. Lustre loss for wheat is also major damage. These factors tend to affect prices and ultimately hit farmers in terms of returns.
The Central government has asked three leading wheat producing states, namely Haryana, Rajasthan and Uttar Pradesh governments to test samples of wheat jointly with Food Corporation of India (FCI) immediately on its arrival so that appropriate relaxation in quality norms can be considered for the procurement.
A prominent wheat trader from Kanpur Mr. Kaushal Kishore Gupta said that presently, new wheat arrival is very limited so it is very difficult to comment on quality. Only 2-3 percent of crop had been harvested in eastern region so far. Wheat arrivals is likely to pick up after two weeks. It got delayed due to adverse weather.
However, Mr. Gupta said that quality relaxation would be needed in region specific where crop damaged severely. Affected farmers may bring wheat with 40-80 per cent damaged grain. It will be very difficult for farmers to limit damaged grain within 10-20 per cent. But badly affected areas and farmers will be scattered. The places where hailstorm and heavy rain was experienced, wheat could be affected badly. But, the farmers from other areas may not be affected. So government should formulate conditions accordingly.
He says that farmers may bring 40-80 percent damaged wheat to open markets where traders and brokers can buy and mixed good quality wheat to bring down ratio of damaged grain. He informed that new wheat is traded at Rs. 1,500/100kg in Kanpur market.
Khanna (Punjab) based trader Mr. Surindar Sahi said that moisture would be higher in the initial phase of arrivals, but will improve as the day’s progresses. He said that quality issue may arise in Haryana because of heavy rain and hailstorm in many parts of the state. Adverse weather already pushed new supply ahead. Now, wheat will arrive in the markets after April 20.
In Punjab, higher moisture may be problem, which will reduce when temperature will increase. Mr. Sushil Mittal from Hissar (Haryana) said that new crop will arrive in next two weeks, but quality is major concern. He says that the government should accept minimum 14 per cent moisture without any deduction. Luster lost percentage should be 10 per cent. But market may see higher percentage. Wheat grain may turn black or white. Golden color wheat will be very limited.
Relaxations in quality norms will be big respite for farmers who have lost their crop in natural calamity. Such relaxation is already boosting market sentiments. During current Rabi season, quality norms for the procurement of wheat, which has lost its shine, have already been relaxed in Madhya Pradesh and Gujarat. After testing the samples in Madhya Pradesh, shrinked and broken grains have been allowed up to 10 per cent.
Bhopal-based wheat trader Mr. Manohar Khandelwal told that wheat prices are picking when government relax quality norms. Mill quality wheat rose up to Rs. 50/100kg at Rs. 1,300-1,350/100kg. Earlier, it was sold at Rs. 1,200-1,250/100kg. Wheat prices increased in other markets of Madhya Pradesh and Gujarat.
In Rajkot, wheat is traded at Rs. 1,350-1,370/100kg from Rs. 1,250-1,275/100kg last week.
According to Mr. Khandelwal, government’s procurement began from March 25, but buying picked up for last one week only. Wheat prices improved by Rs. 50-100 per quintal after relaxations in quality. Although, wheat is being traded below than Minimum Support Price (MSP).
Delhi based trader Mr. Rajesh Jain told that government can provide relief by way of lower quality standard. But it has limited role in such way because it cannot accept wheat with moisture of more than 14 per cent. Such wheat cannot be stored in FCI’s warehouses. Percentage of luster lost is also limited otherwise FCI will have to face problem in selling.
He said that wheat arrival schedule disturbed this year due to untimely rain. Wheat should arrive in Delhi in the second week of March but the supply is still negligible in second week of April. It will also hurt farmers because they wouldn’t be able to get expected price because the market would be flooded from supply of Haryana.
Market expert says that government should announce quality relaxation as early as possible. It will improve market sentiment so the farmers will get some relief. It will also set market tone for the months to come.
(By Commoditiescontrol Bureau; +91-22-61391533)
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