Chennai, Sept. 18 Roller flour mills in the country are weighing the option of importing wheat as its prices have dropped sharply in the global market.
Open sale
“We have to depend on imports for quality wheat as we need raw material. However, the Government will have to restore a 2006 circular on phytosantiary measures for wheat imports or extend it till March next,” said Mr M.K. Dattaraj, President of the Roller Flour Millers Federation of India.
The circular on phytosanitary measures was issued to enable Government agencies such as the State Trading Corporation and MMTC import wheat in 2007 and 2008 when there was a short-supply.
“We have represented to the Government to do the needful in this regard,” he said.
Trade sources said that Food Ministry officials have told industrial users that the Government would not come in the way of imports.
Price crash
Wheat prices in the global market have crashed sharply during the last four weeks. On Thursday, Chicago Board of Trade wheat contracts for September dropped to $4.6175 a bushel of $171 a tonne.
Wheat prices have crashed on hopes of rising global production.
“Currently, we can get wheat from Ukraine between $190 and $200 a tonne c.i.f. Imports are feasible provided the quarantine authorities allow it,” said Mr Pramod Kumar, President of the Karnataka Roller Flour Mills Association.
Ukraine wheat
At this price Ukraine wheat, which can be handy for biscuit manufacturers, can be delivered to the mills in the South within Rs 10,800 a tonne. In contrast, domestic wheat costs Rs 13,700 a tonne.
Wheat (dara), used by flour mills, was quoted at Rs 12,050-12,200 a tonne in New Delhi on Friday on demand, particularly for the festival season.
In contrast to the global market, wheat prices in the domestic market have increased by over Rs 1,000 a tonne. Trade sources said wheat prices were gaining parity with the rates of rice and pulses.
“Only now, wheat prices are ruling around the minimum support price level,” they said.
For the current year, the Government fixed the support price for wheat at Rs 10,800 a tonne. Barring Punjab and Haryana, where the FCI actively procured wheat for buffer stocks, prices in other States had ruled below support level since the arrivals began in April.
“An importer is ready to bring one vessel of Australian wheat to Tuticorin and another to Mangalore if the phytosanitary order is restored,” trade sources said.
Australian wheat is preferred for its quality in making breads and Indian products such as rotis and chappathis.
“The wheat stocks with the mills can hardly last a couple of months. Also, the quality of the wheat in Rajasthan, Uttar Pradesh is inferior and infested with pests,” said Mr Dattaraj.
“The demand for its products is rising. Currently, wheat products are the cheapest among food items,” he said.
Meanwhile, the Government has fixed 79 million tonnes (mt) as the wheat production target this season against a record 80.6 mt last season.
Source : Business Line