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Tuesday, July 16, 2013

Huge wheat stocks at risk in Punjab, Haryana.

Business Line
New Delhi, 15 July 2013

The stocks in kaccha and pucca CAP storage — in the open air, capped with plastic sheets — accounted for about 44 per cent of the 25.08 million tonnes of the total wheat procured by the Government from the recent Rabi crop. In Punjab and Haryana, wheat procurement stood at 16 mt in April-June. Of the 11 mt, about 7.85 mt are stored in pucca CAP, where the plinth is usually a concrete platform. Another, 3.18 million tonnes are stored on kachha plinths, where the base could be wooden planks or simply stacked on the ground. With the monsoon progressing swiftly this year and covering the country a month in advance, these huge stocks look more vulnerable to the risk of deterioration in quality. Since the onset of monsoon, Punjab has received 42 per cent more rain, while the country as a whole got 20 per cent excess. A recent CAG report said the CAP storage should be undertaken as the last resort, considering the risks involved. It is not yet clear how much of these stocks were damaged by the recent downpour in Punjab, where some parts witnessed flooding. Considering the rain-related foodgrain losses in recent years, trade analysts believe the wheat stocks in Punjab and Haryana could have been damaged this year too. The process of rot/fungus will accelerate with high moisture, unless the stocks are quickly used for food or feed application, locally or in exports. The lack of adequate covered space for storing foodgrains is a big challenge for the FCI and other state entities. As on April 1 this year, FCI had a storage capacity of 37.73 mt, of which 3.74 mt was CAP, including hired space. FCI recently said it expects to invite bids soon for building silos with a capacity of 2 mt under the public-private partnership (PPP) mode to store foodgrains. Apart from storage, higher procurement of wheat in States such as Rajasthan and Madhya Pradesh has also affected the movement from Punjab and Haryana during the procurement season. Also, the Government’s move to offload about 5 mt for exports from Punjab and Haryana through private players did not take off as the price quoted was considered high.

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