Flour millers in Punjab may no longer purchase wheat from Uttar Pradesh as the recent levy of 5 per cent advance tax on the cereal entering the State is proving to be expensive.

“It is no longer viable to bring in wheat from UP,” said Naresh Ghai, President of Punjab Roller Flour Millers Association. Also, the Punjab Government has waived taxes of around 3 per cent for millers buying wheat from the local market, he said.

Why millers flocked UP

The Punjab Government’s move is intended to curb inflow of wheat from other States. Earlier, Punjab millers flocked UP, where the prices were lower than the minimum support price, to source part of their requirement.

Also, high taxes of around 15 per cent, including the commission and market fee in Punjab over and above the minimum support price, made it cheaper for them to buy wheat from outside the State.

Trade sources said the Punjab millers used to source about 2-2.5 lakh tonnes of wheat annually from UP, the largest producer of the cereal.

These millers consume about one lakh tonnes a month and their total annual consumption exceeds a million tonnes.

Wheat arrivals, on the other hand, continue to rise in various mandis in Punjab.

Arrivals, buying

So far, procurement by State agencies stands at 6.74 lakh tonnes (lt), while market arrivals are estimated at 7.02 lt.

During the same period a year ago, procurement in Punjab markets stood at 3.59 million tonnes (mt) against arrivals of 3.60 mt.

Procurement in other States is also a tad lower than last year on delayed harvest.

State-owned Food Corporation of India and other agencies have so far procured 6.7 mt against arrivals of 7.97 mt.

Last year, procurement had exceeded 10.9 mt and arrivals exceeded 11.86 mt during the same period.

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