AP: Flour mills in doldrums as wheat goes out of stock

Published: 07th August 2012 09:28 AM  |   Last Updated: 07th August 2012 09:28 AM   |  A+A-

Roller flour mills in the state are in limbo due to a shortage of their main raw material, wheat.

Due to the central government’s decision allowing wheat export from the open market during the recent harvest season, there has been a shortage of wheat for millers. Further, the Food Corporation of India (FCI), which holds a stock of 19.5 million tonnes of wheat against its buffer norm of 7 million tonnes, have procured an additional 37.48 million tonnes of wheat. The FCI warehouses have a total capacity of 63 million tonnes of foodgrains (wheat and rice), but it is holding a stock of 83 million metric tonnes.

Given the exports and the FCI procurement, an artificial scarcity of wheat has been created, leading to an increase in prices. Taking a view of the situation, an empowered committee of ministers of the central government decided to allow sale of three million metric tonnes of wheat under the Open Market Sale Scheme (OMSS) for bulk customers at a uniform price of `1,170 per metric tonnes.

Although allocations under the scheme were made to the states, disparity in the amount of allocations aggravated the situation. Most of the wheat-producing states got larger share. Andhra Pradesh was allocated a meager 21,000 metric tonnes against its demand of 2 lakh metric tonnes while Karnataka, a smaller state than AP, was allocated 2.3 lakh metric tonnes.

“The allocated stock of wheat was lifted in the first tender call itself. There are about 40 roller flour mills in the state supporting several bakers and confectioners apart from producing atta, maida, rawa,” said Roller Flour Mills Association (AP) secretary Mithesh Gupta.

Taking advantage of the situation in the state, Karnataka traders are dumping their products in the state, resulting in losses to several small-scale industries. The government too lose valuable revenue in the form of taxes.

“We have taken the issue to the government’s attention, but there has been no response. We urge the state government to put pressure on the Centre”, Gupta added. 

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