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Haryana Govt agency Hafed to procure 3LMT wheat for exports.
Apr 27, 2022

Haryana State Cooperative Supply and Marketing Federation (Hafed) has decided to enter the wheat export business as it looks to gain from the increase in demand for Indian wheat amid the Russia-Ukraine war.

The federation is targeting a six times increase in procurement in 2022-23, a move traders said will push up domestic wheat prices which have already crossed Rs 50/kg in retail.

Russia and Ukraine account for about a third of the global wheat exports. But the Russian invasion of Ukraine has forced their buyers to scout for other sources, opening an unprecedented export opportunity for Indian wheat traders.

Buyers of Indian wheat have been largely focused on states like Madhya Pradesh, Gujarat, Rajasthan and Uttar Pradesh. Punjab and Haryana have remained on the sidelines due to their high taxes and some quality issues.

'We are getting a lot of export inquiries from London, the Middle East, Egypt, etc.,' said A Srinivas, managing director of Hafed. 'So we have decided to take up this opportunity and procure 2 LMT in a partnership with traders at Rs 2,025/quintal, a price which is above the MSP but below the market price.'

Srinivas said that 'in addition to the 2 LMT, Hafed has decided to procure another 1 LMT at Rs 2020/quintal in districts that fall in the NCR area', as lot of domestic distributors are approaching the federation. 'So far, our highest annual wheat procurement was close to 50,000 tonnes,' he said.

Thus, there is a six times increase in Hafed’s wheat procurement target this year to 3 LMT, when compared to its average procurement of 50,000 tonnes in any given year in the past.

This move by Hafed is expected to increase the inflationary pressure on domestic wheat prices, said traders.

According to the consumer affairs ministry, the on year all India average retail prices of wheat are up by 17%, while the wholesale prices are up by 22%.

Although there is good demand for Indian wheat, there are quality issues in Haryana on account of Karnal bunt disease.

'Only a few districts like Sirsa, Fatehabad, etc. can provide export quality wheat. Some origins like the Middle East are interested in getting wheat flour (aata) instead of whole wheat,' said Srinivas.

Farmers in Punjab are eager to gain from this opportunity. 'We have requested the state government to allow us to procure wheat outside the APMCs without levies, else, Punjab is likely to miss the bus,' said Puneet Singh Thind, director of the Northern Farmers Mega FPO.

economictimes.indiatimes.com

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