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Our Bureau

Chennai , April 27

FEARS over drop in wheat production and a sharp rise in freight charges have resulted in the commodity's prices rising by Rs 1,000 a tonne in the past one month. This is likely to affect the roller flour mills in the South, particularly Tamil Nadu, Kerala and parts of Karnataka.

"There are apprehensions that wheat production could be lower than 75 million tonnes projected by the Centre. Also, freight charges for moving wheat from North to Tamil Nadu and Kerala have gone up by 33.3 per cent, leading to rise in wheat prices," said Mr V.K. Gupta, President, Tamil Nadu Roller Flour Mills Association.

In the recent Railway Budget, the Railways Minister, Mr Lalu Prasad, has rationalised the freight charges, resulting in rise in wheat transport charges.

"Before the budget, the cost to transport wheat by rail from Harda in Madhya Pradesh to Coimbatore was Rs 101 a quintal. After the rationalisation, it has gone up to Rs 135," Mr Gupta said.

According to the flour mills' members, the worry aspect is that while freight charges for wheat have gone up, that of wheat flour has been reduced.

"By the same logic, freight charges for wheat flour should have been raised. Such distortions will only lead to dumping of wheat flour by mills in the North," Mr Gupta said.

According to the association, flour prices will rise by a minimum Rs 50 a quintal as a result at the production point itself.

Already, mills in the South are facing a tough time, as they have to pay a higher price for wheat.

"Since wheat is grown only in the North, we have to foot higher price to get it here. North mills, on the other hand, get it cheaper because they are close to the growing areas and also get the raw material transported by road," Mr Gupta said.

"Mills in Tamil Nadu buy nearly 12 lakh tonnes of wheat from the North and transport it by rail. This is against the total demand of 15 lakh tonnes," he said, adding that the units were running only to 40 per cent of their capacity.

"However, we have to be grateful to Food Corporation of India (FCI) for not hiking the wheat prices during the last six months or so," Mr Gupta said. FCI sells wheat to the mills under the open market sale scheme at Rs 870 a quintal plus tax.

However, the price is higher than the rates at which FCI offers to mills in other parts of the country. In the North, for example, the mills get it at Rs 800 a quintal.

"We have been pressing for a uniform sale price by FCI for long," Mr Gupta said.

According to the flour millers, they are also hurt by reduction in time by 2 hours to clear their consignments at railway sheds, hike in warfage, spillage during transit, infrastructure problems and lack of clear policy with regard to flour exports.

Meanwhile, wheat prices have increased by Rs 15 a quintal in northern markets to Rs 670 in the past week as farmers have reported a fall in yield and production.

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