Storage Crunch Forces Punjab Rice Millers to Halt Operations, Only 25% Milling Completed
Punjab is facing a severe grain storage crisis that has dramatically slowed rice milling operations across the state, with only about 25% of procured paddy processed so far for the 2025–26 crop year. This represents a significant decline from the typical 60% completion rate expected at this stage, creating serious concerns just weeks before the crucial wheat procurement season begins in April.
Sunam Emerges as Epicenter of Storage Crisis
The situation has reached critical levels in Sunam, a major procurement and milling center where Food Corporation of India (FCI) warehouses have completely exhausted their storage capacity. With godowns saturated and movement of rice from mills sharply reduced, millers are being forced to hold large quantities of paddy for extended periods, creating operational bottlenecks throughout the supply chain.
"With FCI storage at zero level in Sunam, the entire supply chain has choked," explained Prem Goel, president of the Akhil Bharatiya Rice Sheller Sangh. "There is no clear roadmap for lifting rice, including improved rice with 10 per cent broken for the 2025–26 season. Unless old stocks are evacuated on priority, managing fresh wheat arrivals will be extremely difficult."
Massive Grain Quantities Compound Storage Woes
Punjab is expected to deliver approximately 10.5 million tonnes of rice to the Central Pool from about 15.6 million tonnes of paddy procured during the kharif marketing season. Compounding the problem, wheat procurement is scheduled to begin in April, with the state likely to contribute nearly 13 million tonnes, placing additional strain on already overwhelmed storage infrastructure.
Industry representatives emphasize that the milling delay stems not from processing capacity limitations but from FCI's inadequate storage space, which has slowed acceptance of rice from mills. Rice millers also highlight that stocks from earlier crop years, including the 2023–24 season, continue to occupy critical storage space, leaving minimal room for fresh arrivals.
Quality Deterioration and Financial Risks Mount
Prolonged storage of paddy on mill premises increases multiple risks as summer approaches and monsoon season looms. Extended holding periods elevate the danger of moisture loss, pest infestation, and quality deterioration—factors that frequently lead to disputes during delivery and potential financial penalties for millers.
"If grain quality suffers due to heat or rain, millers face rejections and penalties, even though the delay is not of our making," added Goel, highlighting the unfair burden placed on processing facilities despite systemic storage failures.
Storage Capacity Analysis Reveals Systemic Issues
Punjab possesses a total covered foodgrain storage capacity of approximately 173 lakh metric tonnes (LMT), including nearly 48 LMT with the FCI and the remainder with state agencies such as warehouses, Markfed, and the Punjab State Civil Supplies Corporation (PUNSUP). Silo capacity in the state stands at about 6 LMT.
Although Punjab procures around 300 lakh tonnes of grain for the Central Pool annually, FCI sources indicate that 190–200 LMT of storage space would be adequate if grain movement remained smooth and timely. Currently, around 18 million tonnes of grain, rice, and wheat from previous years remain stocked in Punjab's godowns, creating severe logistical constraints.
Government Response and Future Challenges
State officials acknowledge the mounting pressure and confirm that the issue of slow evacuation has been raised with the central government. "Punjab procures far more grain than it consumes. Timely movement to deficit states is essential. Any delay creates a chain reaction on storage, milling, and fresh procurement," explained a state government officer who requested anonymity.
An FCI officer noted the recurring nature of the problem, stating, "Every year, we see the same stress points—delayed lifting, storage shortages, and last-minute firefighting." Government-procured paddy continues to accumulate at the premises of nearly 5,000 rice shellers across Punjab, with millers responsible for processing and delivering rice to FCI under the existing system.
Wheat Procurement Season Approaches Amid Uncertainty
The timing of this storage crisis could hardly be worse, with wheat procurement scheduled to begin within the next two months and arrivals expected to peak in April. Punjab is projected to procure nearly 13 million tonnes of wheat during the upcoming rabi season, which will again flow into the Central Pool.
Experts warn that without faster inter-state movement of grain and timely lifting of older stocks, Punjab could face severe logistical challenges during the peak procurement period. The combination of slow rice evacuation, inadequate storage infrastructure, and impending wheat arrivals creates a perfect storm that threatens to disrupt India's food security systems unless immediate corrective measures are implemented.
