Woefully inadequate storage facilities of the Punjab state government — at just 14 million tonnes (mt) — means over 3 mt of wheat could rot as stocks are tipped to climb to a record 17 mt in a few months. Punjab grows nearly 15 mt wheat every year but consumes barely 2 mt, shipping the balance to the rest of the country. However, this year’s record wheat harvests across the country at 94 mt have resulted in a glut.
Rising stocks are expected to force the state food and civil supplies department to leave over 3 mt of wheat in ‘uncovered’ or ‘unscientific’ storage (covered and plinth — CAP) facilities as capacity falls short. “If more exports are not allowed, we will be left with huge stocks and this will force us to keep around 3.3 mt of wheat in unscientific storage systems,” said food and consumer affairs secretary DS Grewal. The government has so far allowed exports of just 2 mt; another 2.5 mt is under consideration.
In the last few years, the Punjab government started buying wheat on April 1 with 5-5.5 mt stocks. This year, Food Corporation of India (FCI) started wheat purchases in Punjab with a stock in excess of 6.5 mt. With the current wheat stock in Punjab pegged at around 14 mt, the state food department anticipates opening stocks on April 1, 2013, at over 9 mt. “We may be left with wheat stocks close to 10 mt when the procurement drive formally starts next fiscal,” Grewal said, adding around 1.5 mt is transported out of the state every month. Between 2008-09 and 2012-13, Punjab’s contribution to the central government’s wheat purchases rose from 9.9 mt to 12.8 mt, an increase of 30%.
Meanwhile, a senior official in the food ministry said work on creating an additional 5 mt of capacity through private players’ investment has begun in Punjab and is expected to be completed by the end of the current financial year.
“More than 4.1 mt of storage capacity will be added by private investment in warehouses through the private entrepreneur godown scheme by the end of this fiscal, while close to 1 mt of capacity will be added by state government agency and Central Wearing Corporation,” AS Arunachalam, deputy general manager, Food Corporation of India (FCI), Punjab told FE recently.