Food Minister K V Thomas on Friday said increase in retail prices of wheat and flour is due to cartelisation by traders and flour millers.
To check prices and clear surplus stocks, the government is selling wheat from its central godowns at a subsidised rate of Rs 12.85 per kg to bulk users like flour millers under the open market sale scheme (OMSS). Despite the release of wheat in the open market, retail prices have been on the rise.
“When I am giving wheat at a subsidised rate, they (flour millers) should reduce the atta (flour) price. Have they reduced the price, they have not? They have cartelised,” Thomas told reporters on the sidelines of an event when asked the reasons for price increase in wheat items.
Of three million tonnes of wheat, the Food Corporation of India (FCI) has so far released 2.3 million tonnes of wheat under the OMSS, he said.
The minister further said he would soon take a proposal before the Cabinet seeking approval for release of additional seven million tonnes of wheat under the OMSS to bulk users in the coming months to contain prices.
In Cochin, wholesale price of wheat has risen slightly by 50 paise to Rs 18.50 a kg in the last three months. Whereas in Delhi, wheat MP has increased by Rs 4 to Rs 20 a kg and chakki atta (wheat flour) prices have increased by Rs 3 to Rs 15 a kg in the period under review.
Prices are rising despite bumper domestic crop of 93.90 million tonnes in the 2011-12 crop year (July-June).