India: Punjab faces 9.5 mnt storage gap ahead of new paddy procurement

• Punjab has 27.5 mnt of foodgrain stocks against storage capacity of 18 mnt
• State targets procurement of 18.3 mnt of paddy from October 1

Punjab is facing a significant foodgrain storage shortage ahead of the paddy procurement season beginning October 1. The state has more than 27.5 million tonnes (mnt) of foodgrain stocks against storage capacity of around 18 mnt. The limited space has raised concerns over the handling and storage of the incoming paddy crop. The state has set a target to procure 18.3 mnt of paddy during the new season. With the crop expected to add substantial volumes to existing inventories, clearing old rice stocks has become important for maintaining smooth procurement and milling operations.

Rice stocks add to storage pressure

Around 15.5 mnt of rice from the previous three procurement seasons remains in the system. This includes approximately 0.9 mnt from 2023-24, 5.8 mnt from 2024-25 and 8.3 mnt from 2025-26. In addition, around 1 mnt of paddy from the previous season is awaiting milling. This could generate nearly 0.6 mnt of rice, adding further pressure on available storage space. Government agencies have been using rice mills and mandi yards to accommodate stocks as warehouse availability remains constrained. Faster movement of existing rice inventories is therefore important before fresh paddy arrivals increase.

New crop could increase pressure

Punjab’s Agriculture Department expects the state’s paddy yield to exceed 21 mnt this season, with the crop cultivated across around 3.27 million hectares. The Centre has fixed the minimum support price (MSP) for paddy at INR 2,461/quintal for the current season. Procurement arrangements are in place from October 1, while the Food Corporation of India (FCI) will handle the movement of procured rice to consuming states. The Reserve Bank of India (RBI) has sanctioned around INR 503.38 crore in cash credit for procurement, with INR 427.87 crore already credited for October purchases.

Rice movement needs to accelerate

Industry sources said Punjab needs to increase foodgrain lifting to around 2 mnt per month, compared with the current pace of 1.1–1.3 mnt. The rice industry has sought clearance of at least 5 mnt of storage space by December 31. Faster movement of existing rice stocks would create space for newly procured paddy and reduce pressure on rice mills, mandis and government warehouses.

Outlook

Punjab’s storage situation is likely to remain tight as the new paddy crop enters the procurement system. Faster evacuation of existing rice stocks and higher foodgrain lifting will be important to create space for the expected 18.3 mnt paddy procurement and prevent storage bottlenecks during the peak procurement period.