M A I N   N E W S

Kneadled: Wheat flour prices shoot up
All-Time High: Rs 14 to Rs 16
Ruchika M. Khanna
Tribune News Service

Chandigarh, November 27
Prices of wheat flour have touched an all time high of Rs 14 to Rs 16 per kg, thus upsetting the budget of most households. Never ever has the price of wheat flour - the staple diet in most North Indian homes - seen such a drastic rise.

While the branded flour is available in the market for Rs 16 a kg, non-branded flour is available for Rs 14 a kg. Throughout the year, prices of wheat flour have been on the rise. Last year, non-branded flour was available for Rs 8.50 to Rs 9 per kg, which had increased to Rs 12 a kg in January this year. The prices saw a correction as the wheat crop reached the mandis in April. However, this correction in prices was short- lived, and the prices again rose to Rs 12. 50 in September.

Flour mill owners in the region said the Food Corporation of India (FCI) had not released wheat for small flour mills in the region for the past several months. Since the buffer wheat stocks of the FCI were less than required, they were unwilling to release wheat in the open market. The wheat production, too, has been very low this year (from 76. 3 million tonne in 2004-05 to 69. 5 million tonne in 2005 -06), while the annual consumption of wheat increases by almost 2. 5 per cent. In the wake of rising international wheat prices $ 172 per quintal to $ 240 now, even import of wheat will be economically not viable. “This is the reason that the price of flour has gone up rapidly. The flour is now selling for Rs 13 to 13.50 per kg, at retail shops in Punjab, Haryana, and other parts of the region, except Chandigarh where it is selling at highest price of Rs 14 per kg,” Mr Vinod Mittal, president of Chandigarh Roller Flour Mills Association, informed.

Small flour millers said since the FCI had not released wheat to their mills for the past several months, and as a result they were forced to buy the expensive wheat from the open market. “Though the farmers are paid Rs 650 to 700 per quintal of wheat, this is now available in the open market for Rs 1,100 in the region and at Rs 1,165 per quintal in Delhi. We buy the wheat after paying eight per cent taxes (VAT, commission to agents, market fee) and transportation fee, the wheat is available to the ‘atta chakki’ owners for Rs 1,200 per quintal. About Rs 150 per quintal is the fee charged for processing wheat to flour, which means that per quintal, we are making just Rs 50 (or 50 paise per kg). As the prices of wheat are increasing, we will have no option but to increase the price of flour,” Mr Gian Chand Gupta, president of Food Products and Manufacturers Association, explained.

Millers say that whenever the flour price begins to shoot up, the FCI is supposed to release wheat stock in the open market to check the rise in flour price. However, this time, there is unusual delay in releasing the wheat stock to bring the flour price down. Mr Gopal Gupta, president of Punjab Flour Mills Association, says, “We have taken up the matter with the Joint Secretary in the Planning Department and urged him to ensure that the FCI releases wheat in the open market, so that the prices stabilise. He has assured us that this will be done soon and the wheat can be released by the FCI by the end of December or beginning of January”.



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