• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

M.R. Subramani

Chennai, Jan. 2 Though the Centre’s move to scrap Customs duty on wheat flour may not have any effect on the roller flour milling industry immediately, it could prove “disastrous’ in the long- term, according to industry players.

“We may not feel the impact immediately as wheat prices are the cheapest in India. But in the long run it could prove disastrous,” said Mr Pramod Kumar, Chairman of the Karnataka Roller Flour Mills Association and Director of Sunil Agro Foods.

“Let’s not go by day to day situation. The move is disastrous. Crores of rupees have been invested in putting up mills and lakhs of workers depend on the livelihood through wheat flour mills,” said Mr K.S. Kamalakannan, Convenor of Mills Federation of India and President of Tamil Nadu Roller Flour Mills Association.

“We will take up the issue and fight it out,” he said.

Currently, wheat dara in New Delhi is ruling at Rs 10,500 a tonne and if the consignment is to be delivered at the mills in the South, it could cost Rs 12,500. In contrast, global wheat prices are ruling at Rs 18,500 a tonne f.o.b.

“Currently, raw material prices could be lower in the country, but things can change quickly. Such policies will only kill the industry,” said Mr Kamalakannan.

What is causing anxiety among roller flour mills, particularly in the South, is that flour mills with huge capacities have come in from countries such as Singapore and Malaysia.

“They are all big players and they are all located near the ports. They simply can hire a Panamax vessel, load the flour and push it into our country. That will be enough to undo us all,” said Mr Pramod Kumar.

“We don’t understand why the Centre has resorted to such a step now. There are no supply problems and wheat flour is not witnessing any rise in prices. In fact, they are ruling below last year rates,” he said.

On Wednesday, resultant flour in New Delhi was quoted at Rs 1,049 for a 90-kg bag against Rs 1,107 during the same time a year-ago.

“The Centre’s move is likely to open up a lot of problems. At least 25 per cent of the flour in the country is branded and flour also comes from Delhi after all by-products are removed. Such a situation will arise if duty-free imports are allowed,” he said. Flour mills in the South have already been complaining about lack of level-playing field what with mills in the North getting wheat at cheaper rates.

Mr Kamalakannan said flour mills could come together to fight the threat of imports.

“We are not sure how long duty free imports will be allowed. If it is to tackle inflation, it is fine but to allow it permanently, it definitely can hurt in the long-term,” said Mr Pramod Kumar.

The Centre had been saying it would allow duty-free import of flour if its prices increased. “But the timing and given the price situation, it is not clear what the Centre wants to do,” said industry sources.

More Stories on : Agricultural Policy | Wheat | Exports & Imports | Excise and Customs

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Greenfield cargo airports may get nod

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line