Wheat price rise hits flour mills

The flour mills in the country have been hit by the sudden spurt in wheat prices across the nation. The price of wheat has shot up to Rs 9,000 per tonne in the past fortnight weeks from the earlier Rs 8,000 per tonne.

Karnataka Roller Flour Mills Association president Ashok Kumar Gupta said: "There is a huge gap between production and demand. As on August 1, 2004, Food Corporation of India (FCI) had an open stock of 19 million tonnes, of which 11 million tonnes goes for Public Distribution System. Another 4 tonnes goes as buffer stock while the remaining 4 tonnes comes for open sale from where we can pick up wheat for our business. This is considerably low, compared to the demand we are facing."

He added that as demand from neighbouring countries has been increasing, most of the wheat meant for open sale is being diverted to exports.

"There is no export duty on wheat while if we have to import wheat we have to pay a 50 per cent import duty. This is not a level playing field for Indian flour mills. We are urging the Government of India to impose export duty and lower the import duty so that we can survive in our business."

Gupta also noted that roller mills across the country are constantly meeting Government authorities and asking for a clear policy on wheat pricing.

"It is high time pricing is controlled and this has to be ensured for survival of this industry. We are already running at 35 per cent of our capacity and if things don't improve we might have to reduce capacity. Our association across the country has nearly 1,000 members and each of us employs 40-50 people per unit. Employment is at stake and the situation should be improved at the earliest," he urged.