Agri Business

Flour millers want Centre to supply FCI wheat stocks during off-season

Prabhudatta Mishra | Updated on: May 04, 2022
Flour millers are believed to have informed the Food Ministry about a possible decline in wheat procurement in the range of 22-25 mt, against the target of 44 mt this year

Flour millers are believed to have informed the Food Ministry about a possible decline in wheat procurement in the range of 22-25 mt, against the target of 44 mt this year

Express fear production might be lower than initial estimates, point to lower procurement

Roller flour millers in the country have urged the Centre to keep its open market sale scheme (OMSS) of the Food Corporation of India (FCI) open, particularly during the off-season to ensure that there will be no shortage of the grains and prices of wheat products such as maida, suji and others remain under control.

They have pointed out to reports of a drop in wheat production to 95-100 million tonnes (mt), which is lower than the official estimate of 111.32 mt, and the substantial decline in procurement, in seeking to keep the OMSS window open.

Flour millers are believed to have informed the Food Ministry about a possible decline in wheat procurement in the range of 22-25 mt, against the target of 44 mt this year as open market prices are ruling higher than the minimum support price of ₹2,015 a quintal following export demand.

No tender after April 1

In February, the Food Ministry notified the open market sale scheme (OMSS) in which it said no sale will be undertaken during the procurement period in the procuring regions, even though the sale of wheat may be continued until December 31. Sources said FCI has not issued any tender since April 1 in non-procuring States under the direction of Food Ministry due to low stock position.

The OMSS policy for 2022-23 also asked surplus-procuring States to retain stocks under State pool for their own schemes as they will not be allowed to participate in e-auction for purchase of wheat. The OMSS price of wheat has been fixed at ₹2,200/quintal in April-September and ₹2,225/quintal from October to March for the fresh harvest from Punjab, Haryana and Madhya Pradesh. However, for other centres, freight rate from Bhopal or Ludhiana has to be added as per place of loading.

Lowest since 2018

The Central Pool’s wheat stock as on April 1 was 19 mt, the lowest since 2018, when the stock was 13.23 mt. However, the procurement in 2018-19 was 35.8 mt that helped the government to meet the grain requirement for different welfare schemes.

Flour millers have pointed out that wheat procurement in the ongoing season as of April 27 was at 15..32 mt, which is about 35 per cent lower than the year-ago period’s 22.23 mt. As any significant improvement in the official purchase in the next few weeks looks unlikely, procurement is likely to get restricted around 22-25 mt, millers said.

“As the millers used to buy their wheat requirement from the government stock in the off season, the open market prices never increased. However, there is multiple buying happening this time - for export, for milling and some purely for stocking. Wheat is such a commodity that stock limit cannot be implemented as the purchases in 2-3 months (April-June) cater to the entire demand of the year and the grains are ultimately stored somewhere,” said a flour miller.

However, official sources in the ministry said millers should be prepared to buy from the open market as this is not a normal year and the government would definitely intervene in case of any extraordinary price rise through various measures including OMSS. The sources said the government is aware of the minimum requirement of wheat and that will be achieved in the procurement season this year.

Published on April 28, 2022
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