CHANDIGARH, 15 May 2025: As the wheat procurement season draws to a close in Punjab, the state has crossed its initial target, with a total of 129 lakh metric tonnes (LMT) of wheat procured so far. Of this, 118 LMT has been bought by government procurement agencies and 10 LMT (8.23%) by private traders.
Punjab had originally aimed to procure 124 LMT of wheat this season but was prepared for a maximum of 132 LMT. Last year, the total wheat procurement stood at 130 LMT, including 123 LMT by agencies and 7.18 LMT by traders.
Private players were particularly active this year, offering rates higher than the minimum support price (MSP) of ₹2,425 per quintal in several districts. This marks a significant jump from last year's 5.51% share in private procurement.
However, despite aggressive early buying, private traders faced squeezed profit margins due to an anticipated bumper yield and the risk of excess supply, which could lower market prices over time. Traders typically store wheat and sell it to flour mills later at a markup.
Historically, private traders hesitated to buy in Punjab due to its higher taxation regime—8.5% combined levies including a 3% market fee, 3% rural development cess, and 2.5% commission to arhtiyas. In comparison, most other states charge around 3% in procurement levies.
Image credit: world-grain.com
Daily arrivals in mandis dipped to 45,941 metric tonnes on Wednesday, and 102 LMT of procured wheat has already been lifted from the grain markets.
Punjab’s performance this season demonstrates both robust procurement infrastructure and a growing interest from the private sector, despite fiscal disincentives and volatile margins.
