Flour millers have demanded from the Centre to allocate wheat to them at a fixed rate and as per their requirement instead of adopting time-taking tender process that has failed to keep prices under check.

 

Millers have urged the government to look into their demand urgently as not much wheat is available in the market for them to process and said they would be forced to import, which is cheaper than the domestic rate, despite adequate availability of the foodgrain in Central Pool.

 

The Centre had announced sale of 8.4 lakh tonnes of wheat to bulk consumers like flour millers through tender under the open-market sale scheme (OMSS). In first phase, only 80,000 tonnes have been lifted by the millers.

 

"As the government's intention is to check price rise, it should provide wheat to flour millers directly as per their requirements and at a fixed price as it was done earlier," Roller Flour Millers Federation President M K Dattaraj told reporters here today.

 

The wheat prices have increased in the last one-and-half months across the country by Rs 50-60 a quintal, while in Bangalore it has risen by Rs 150 a quintal, he added.

 

Dattaraj said the tendering process is taking longer time and conditions like fixing the same limit for both small and large processors are the reasons for lifting to be low.

 

The maximum quantity for which bids can be made has been kept at 1,000 tonnes, which could hardly meet the 4-5 days milling requirement of an average flour mill, he said.

 

"A miller with a monthly capacity of 30 tonnes can bid for 1,000 tonnes, while mills with 600 tonnes per day capacity can also buy a maximum of 1,000 tonnes from OMSS wheat," Delhi Flour Millers President Prem Goyal said.

 

Goyal informed that despite presence of 15 flour mills in Delhi, the offtake is about 29,000 tonnes in the first phase, while FCI wanted to sell 50,000 tonnes. It means smaller plants have also cornered the wheat, even though they do not require that much quantity for their own consumption. Flour millers said they would require about four million tonnes of wheat till March-end, by which time the new crop would arrive in the market. As the government has procured over 22 million tonnes compared to its requirement of 15 million tonnes, it should not have problems to sell the wheat to the processors, they contended.

 

Dattaraj hoped that wheat price would come down by Re one per kg once the government announces that it would release the grain to millers directly as it would weaken market sentiment.

 

Former President of Wheat Products Promotion Society Vinod Kapoor said out of 78.4 million tonnes estimated production, the government has bought 22.68 million tonnes and there was not much stock of wheat with farmers now, since there are only four months to go before new season begins in April 2009.

 

He also pointed out that there wasn't much procurement in the private sector because of stock limit imposed under the Essential Commodities Act.

 

The millers may be forced to import wheat if the prices in the domestic market remain high and the government refuse to supply the grain to them, he added.

 

However, millers are apprehensive about change in the import policy and are not contracting for imports even as domestic prices are higher than global prices, Kapoor said.

 

Currently red wheat of Black Sea origin is available at 160 dollars a tonne for delivery at ports located in the southern parts while Australian wheat quotes 200 dollars a tonne (about Rs 1,000 per quintal), he said.