Chennai: Atta (flour) prices are likely to increase as flour mills are finding it difficult to get wheat transported to their gates at competitive prices. This is mainly in view of the Railways’ decision to stop allocation of wagons for transporting wheat from the growing areas by the private trade.
The mills have now to depend on roadways to transport wheat but it is turning out to be a costly affair.
“All over India, the private trade is not allocated wagon and railways are allocating wagons for moving wheat purchased by the Food Corporation of India (FCI) for buffer stocks,” said K.S. Kamalakannan, President of Tamil Nadu Roller Flour Mills Association.
“The Railways have not published or announced the decision to not allocate wagons for wheat to private trade. It seems to have been done through an internal circular,” he said.
On Tuesday, the Railways Minister, Lalu Prasad, told the Rajya Sabha that Railways would not transport wheat for the private trade.
“Usually, the Railways does not transport wheat procured by the private trade in Haryana and Punjab during this period of the year. But this time, we are not able to transport it from other parts of the country such as Madhya Pradesh, Rajasthan, Gujarat and Uttar Pradesh,” said M.V. Balasubramaniam of the Salem-based Narasu’s Flour Mills.
Civil restrictions
Trade sources said “Civil restrictions” have been clamped, a move that has been resorted to after 1961.
“We are facing a lot of hardship in view of the Railways’ decision. If we want to move wheat from, say, Tuticorin to Salem, we can’t. One wagon of wheat helps us meet demand for 20 days. But now, we are not able to plan our production,” he said.
If moving wheat by railway wagon costs Rs 1,350 a tonne, transporting the grain by road costs Rs 2,350 a tonne.
“The additional cost will have to be borne by the consumer and it means further inflation” said Balasubramaniam.
By rail, mills can get 2,500 tonnes through wagons, while by road, they will be able to transport only nine tonnes in a lorry.
The Centre is trying to mop up as much wheat as possible for buffer stocks as part of its measures to combat soaring inflation. It has set a procurement target of 150 lakh tonnes this year but going by current trends, it is likely to end up procuring at least 170 lakh tonnes.
Like an ‘emergency’
Flour millers say the current situation reminds them of an “emergency” or a “war-like situation”. “The problem is that some of us have moved wheat to the rail heads. From there, we are unable to move in view of the sudden embargo on private trade,” said Kamalakannan.
Worst hit by the Railways’ move could be consumers of wheat in Kerala and Tamil Nadu. “Mills in Karnataka and Andhra Pradesh can to an extent manage by getting wheat through roadways,” Balasubramaniam said.
“We are moving wheat to our mills by roadways, though our overhead costs are increasing,” said Pramod Kumar, President of the Karnataka Roller Flour Mills.
Price quotes
With global wheat prices ruling high, imports by private trade, allowed at zero customs duty, is out of question. Though prices have crashed this week, they are still higher than domestic prices.
On Wednesday, wheat (dara) was quoted at Rs 1,045-1,090 a quintal in New Delhi. The price quoted is Rs 10-30 lower than on Tuesday. Last year, prices were at least Rs 100 lower during the same time. However, the minimum support price for wheat last year was Rs 850 a quintal and this year, it has been raised to Rs 1,000 a quintal.
“If the Centre is keen to ensure steady prices for wheat in the open market, it should revive the Open Market Sale Scheme and allocate at least 50 lakh tonnes for it,” said Kumar.
The mills have now to depend on roadways to transport wheat but it is turning out to be a costly affair.
“All over India, the private trade is not allocated wagon and railways are allocating wagons for moving wheat purchased by the Food Corporation of India (FCI) for buffer stocks,” said K.S. Kamalakannan, President of Tamil Nadu Roller Flour Mills Association.
“The Railways have not published or announced the decision to not allocate wagons for wheat to private trade. It seems to have been done through an internal circular,” he said.
On Tuesday, the Railways Minister, Lalu Prasad, told the Rajya Sabha that Railways would not transport wheat for the private trade.
“Usually, the Railways does not transport wheat procured by the private trade in Haryana and Punjab during this period of the year. But this time, we are not able to transport it from other parts of the country such as Madhya Pradesh, Rajasthan, Gujarat and Uttar Pradesh,” said M.V. Balasubramaniam of the Salem-based Narasu’s Flour Mills.
Civil restrictions
Trade sources said “Civil restrictions” have been clamped, a move that has been resorted to after 1961.
“We are facing a lot of hardship in view of the Railways’ decision. If we want to move wheat from, say, Tuticorin to Salem, we can’t. One wagon of wheat helps us meet demand for 20 days. But now, we are not able to plan our production,” he said.
If moving wheat by railway wagon costs Rs 1,350 a tonne, transporting the grain by road costs Rs 2,350 a tonne.
“The additional cost will have to be borne by the consumer and it means further inflation” said Balasubramaniam.
By rail, mills can get 2,500 tonnes through wagons, while by road, they will be able to transport only nine tonnes in a lorry.
The Centre is trying to mop up as much wheat as possible for buffer stocks as part of its measures to combat soaring inflation. It has set a procurement target of 150 lakh tonnes this year but going by current trends, it is likely to end up procuring at least 170 lakh tonnes.
Like an ‘emergency’
Flour millers say the current situation reminds them of an “emergency” or a “war-like situation”. “The problem is that some of us have moved wheat to the rail heads. From there, we are unable to move in view of the sudden embargo on private trade,” said Kamalakannan.
Worst hit by the Railways’ move could be consumers of wheat in Kerala and Tamil Nadu. “Mills in Karnataka and Andhra Pradesh can to an extent manage by getting wheat through roadways,” Balasubramaniam said.
“We are moving wheat to our mills by roadways, though our overhead costs are increasing,” said Pramod Kumar, President of the Karnataka Roller Flour Mills.
Price quotes
With global wheat prices ruling high, imports by private trade, allowed at zero customs duty, is out of question. Though prices have crashed this week, they are still higher than domestic prices.
On Wednesday, wheat (dara) was quoted at Rs 1,045-1,090 a quintal in New Delhi. The price quoted is Rs 10-30 lower than on Tuesday. Last year, prices were at least Rs 100 lower during the same time. However, the minimum support price for wheat last year was Rs 850 a quintal and this year, it has been raised to Rs 1,000 a quintal.
“If the Centre is keen to ensure steady prices for wheat in the open market, it should revive the Open Market Sale Scheme and allocate at least 50 lakh tonnes for it,” said Kumar.
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