Flour millers and biscuit makers will get windfall gains of Rs 1,900 crore with the government deciding to supply them 3 million tonnes of wheat at subsidised price of Rs 1,170 per quintal.
Short of storage space in the monsoon season, the government yesterday decided to sell wheat atRs 1,170 per quintal to bulk users under the open market sale scheme (OMSS), against the procurement price plus other costs ofRs 1,822 per quintal.
Flour millers said they would pass on the gains to consumers who can hope to get products like flour, maida, and sooji at reduced rates.
"We will benefit from the OMSS sale. It will bring down retail prices of wheat products mostly in consuming states and not so much in producing states like Punjab," Roller Flour Mills Federation of India President Adi Narayan Gupta said.
Gupta said the price fall is expected to be more in southern states as the government promises to bear the entire freight cost. As wheat is available at lower price in northern states, there might not be big change in prices.
Presently, retail price of unpacked wheat flour is ruling atRs 16 per kg, while branded wheat flour is available atRs 19 per kg in the national capital.
Karnataka Flour Millers Association ex-president M K Datta Raja said, "It is good for industry as we will get wheat at lower price. This gain will be passed on to consumers as retail prices of wheat products may come down by uptoRs 3 per kg in southern states."
In Bangalore, retail price of wheat flour may come down toRs 13.50 per kg from currentRs 15 per kg. Similarly, maida may costRs 13 per kg instead ofRs 15.35 per kg, he said.
In order to benefit consumers in Northern India, Punjab Roller Millers Association President Naresh Ghai, however, suggested that "the government should keep wheat price for north millers belowRs 1170 per quintal."
There are as many as 1,200 flour millers across the country, of which 75 per cent are located in north India. The total annual capacity of these mills is estimated to be 25 million tonnes, industry experts said.
To create space for new crop, the government has also decided to give additional 5 million tonnes of foodgrains to BPL families through ration shops. Presently, the government godowns are overflowing with a record 82 million tonnes of foodgrains against the storing capacity of 63 million tonnes. The stocks have risen due to a record production and procurement in the last few years.
