Agri Business

MNCs buying up wheat for exports

M. R. Subramani Chennai | Updated on November 16, 2017 Published on July 12, 2012


Multinational companies and exporters are taking advantage of lower wheat prices in the country.

They are now buying wheat at prices lower than the minimum support price of Rs 12,750 a tonne fixed by the Government and moving it to ports.

This is because while wheat in most Uttar Pradesh markets is ruling below Rs 12,000, wheat of Black Sea origin is quoted at $278 (above Rs 15,500) a tonne for September delivery. The quality of Black Sea wheat, grown in Russia and Ukraine, is seen at a par with Indian milling wheat.

Since June 15, wheat prices have increased 31 per cent in the global market on fears over dry weather affecting the US crop. On Thursday, wheat was quoted at $8.4475 a bushel ($310/Rs 17,700 a tonne) on the Chicago Board of Trade.

The movement of wheat to port towns has led to traders in the North cancelling their supply contracts with flour mills in South, particularly Tamil Nadu.

“Until a week ago, we were getting wheat delivered in Tamil Nadu at Rs 14,750 a tonne. But now, no one is coming forward to supply even at Rs 16,000,” said Mr M.V. Balasubramanian, Managing Director of Sarathy Enterprises (formerly Narasu’s Roller Flour Mills).

The problem for mills in Tamil Nadu is that they have to buy some 2,050 tonnes to transport wheat by rail rakes. “We have to order rakes two months ahead,” said Mr Balasubramaniam.

“We face an uphill task of getting supplies since the Centre has allotted only 90,000 tonnes till September under the Open Market Sale Scheme (OMSS). Karnataka, on the other hand, has been allotted 2.34 lakh tonnes,” said Mr K.S. Kamalakannan, President, Tamil Nadu Roller Flour Mills Association.

Under OMSS, wheat is being sold at Rs 11,700 a tonne from stocks held by the Food Corporation of India. In the first OMSS auction on Wednesday, 50 per cent of the allocation made for Tamil Nadu was lopped off.

“The rest could be bought off in the next auctions on July 18,” said Mr Balasubramaniam.

Wheat being moved to the ports is either last year’s stock or diverted from the public distribution system, said a South-based miller.

While Tamil Nadu millers are seeking a cap on exports, millers from other States want the quota under OMSS to be raised.

Meanwhile, the State Trading Corporation has cancelled sale of 98,000 tonnes wheat for exports to the Swiss firm Glencore. While 30,000 tonnes of wheat were to be sold at $230 a tonne, the rest was to be sold at $228.

Published on July 12, 2012

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.