The Centre has allocated 13 lakh tonnes (lt) of wheat for sale in the open market during September-October to bulk consumers. Of this, it has set aside three lakh tonnes as reserve with the Food Corporation of India for allocation to non-wheat procuring States.
The Food Ministry has also raised the price for the wheat under the open market sale scheme to Rs 1,285 a quintal from Rs 1,175 last month.
Freight charges
In addition, buyers will have to pay freight charges from Ludhiana. Earlier, consumers were not asked to foot freight charges.
This means, for example, a flour mill in Tamil Nadu will have to pay Rs 1,410 for buying a quintal of wheat through the open sale scheme.
South upset
The allocation of 10 lt, however, has left flour mills in South India upset. Mills in Puducherry have not got a single grain allocated, while the rest have totally been allocated about 40,400 tonnes. Uttar Pradesh has got the highest allocation of 2.10 lt, followed by West Bengal at 1.33 lt and Rajasthan at 1.12 lt.
According to sources, the allocation for southern States has been made based on their offtake of wheat through the public distribution system. However, mills are betting on the three lt that has been set aside for non-wheat procuring States.
In a letter to the Food Corporation of India (FCI) Chairman, the Food Ministry has said that while Andhra Pradesh has been allocated 3,532.66 tonnes, Karnataka would be given 9,149.19 tonnes. Kerala has got 20,000 tonnes and Tamil Nadu 17,000 tonnes.
‘Meagre allocation’
The Tamil Nadu Roller Flour Mills Association, in a statement, said that the allocation was meagre compared with the quantity sought by it. The Association President, K.S. Kamala Kannan, had during his meeting with Union Minister of State for Food K.V. Thomas sought an allocation of one lakh tonnes.
The association said that in a tender floated by the FCI on August 25 when 10,834 tonnes were on sale for Tamil Nadu and 1,743 tonnes for Puducherry, only five millers got wheat as traders were also allowed to bid.
According to sources, though the Centre had decided to release 30 lt of wheat under the open market sale scheme only 13 lt have been released so far.
“We are once again writing to the Food Minister to consider our case sympathetically,” said Kamala Kannan.
On the other hand, Kerala Roller Flour Millers Association President, P.K. Ahammed, said that the Centre could release more wheat to the South in two weeks from the three lakh tonnes set aside.
“Maybe, the Government could have allocated us additional quantity,” he said.
On its part, the Karnataka Roller Flour Mills Association said that it will discuss the issue during its meeting with C. Rangarajan, Economic Advisor to the Prime Minister on September 4.
However, sources said that Karnataka had got a higher allocation of over one lakh tonnes during July-August.
Stock-starved
Flour mills in the country, particularly South, are starved of stocks despite coming forward to offer a higher price.
“We now have to pay Rs 2,100 a quintal for getting wheat from the open market,” said a miller from Karnataka.
Wheat prices zoomed to a record high of Rs 1,625 in the benchmark New Delhi market. On Friday, prices were quoted at Rs 1,601.65 against Rs 1,610 on Thursday.
While the country has produced a record 93.9 million tonnes of wheat, the Centre, on its part, has procured a record 38 million tonnes. Of the remaining quantity, one-third is being held back by growers as seed. While at least 10 lakh tonnes have found their way into the export market, the rest is being held back either by traders or growers.
Futures
In the futures market, wheat for September delivery was quoted marginally lower at Rs 1,571 a quintal but October contracts were quoted higher at Rs 1,560. November and December futures, too, ended higher at Rs 1,567 and Rs 1,582.
Globally, wheat prices have surged on fears over lower crop in the US, affected by a worst drought in five decades, and the Black Sea region.
On Friday, wheat on Chicago Board of Trade for December delivery was quoted at $8.9425 a bushel (Rs 18,250 a tonne).