The Hindu Business Line : `Wheat for exports being diverted to domestic market'

A FEW flour millers-cum-exporters in Maharashtra and Gujarat have allegedly diverted the supply of wheat obtained from the Food Corporation of India (FCI) for export purpose to the domestic market, according to Mr Kanhaiyalal Gidwani, a member of Maharashtra Legislation Council (Maharashtra).

The FCI is supplying wheat to flour millers at Rs 7,600 to Rs 7,800 per tonne. For export purpose, the Government gives a subsidy of Rs 1,500 a tonne. At present, wheat (mill quality) price in the open market is about Rs 9,500 a tonne, he said.

The corporation has released about 80,000 tonnes of wheat to flour millers and exporters for November and December. Actual export of wheat flour from the country is negligible during this period.

"With the diversion of this quantity, the FCI will have to bear a loss of about Rs 28 crore. It includes Rs 12 crore by way of export subsidy loss and Rs 16 crore by way of price difference between open market and export supply," Mr Gidwani said.

"At the time when the FCI is not holding any wheat stock against open market sale in Maharashtra, the flour millers are taking unethical advantage of the Government's policy, where the exporter is given three-months' time to export the wheat. In this time, the exporter is lifting wheat at lower price and diverting it to local market, by misusing the subsidy also," he alleged. "Exporters are trying to lobbying for increase in export duration from three months to six months."