Fci Makes A Bad Hash Of Wheat Dole-Out

Wheat prices have witnessed volatile movements of late owing to market uncertainty and the delay in releasing stock to the open market despite sufficient pile-up.

Though mill quality wheat prices touched a high of Rs 850 a quintal in the third week of November from Rs 650 a quintal quoted during the beginning of the month, it has now remained stagnant at Rs 800 quintal. Similarly, high quality wheat including those of Ganganagar tukdi prices rose from Rs 800/825 to Rs 950/975 a quintal, which has now come down to Rs 900/925. Vinat quality also increased by about Rs 150 a quintal within a month.

 

Wheat products like rawa and maida, too, have followed suit and witnessed a rise of about Rs 100 per bag of 90 kg during Diwali.

Sources said several factors have led to an upsurge in wheat prices.

The Food Corporation of Indias (FCI) market intervention scheme was a failure because of its uncertain policies of releasing wheat and abnormal delays in release of stock to the open market.

The most important reason, however, was the pattern of stock allotment to the bidders.

Roller flour mills were given negligible wheat stock against their higher demand, which compelled them to buy wheat at a high premium of about Rs 200/250 a quintal from the open market.

D P Yadav, union minister of food and civil supplies, had announced that 6 lakh tonnes of wheat would be released every month from December to March, which is one lakh tonnes higher than the quantity released in November. But, according to sources, nothing has been released till date.

This will aggravate the situation, which may further affect prices, sources said.

If the government gives no priority to the roller flour mills for the maximum allotment of wheat supply, the situation of shortage and high prices may continue or become worse, Ajay Goyal, president of Roller Millers Federation of India, said.

The government should go for import under open general list (OGL) instead of keeping it canalised through the Food Corporation of India (FCI), he said.

If the upsurge in prices continues, what will happen to the governments wheat procurement programme for the 1997 marketing season? The government will have tough time procuring wheat in the new season for reserve stock.

The government was able to procure 8.3 million tonnes of wheat this year. If the trend persists, the government will be able to procure hardly 4 to 5 million tonnes, he added.

Goyal said that the government should announce the import policy at the earliest so that not only the will the prices come under pressure, but the government will also be able to procure more wheat for the 1997 season.

With a wheat stock of about 8 million tonnes and a monthly offtake of about 1.1 to 1.2 million tonnes, the government will be left with about 2 million tonnes by April 1, 1997, which, sources said, is alarming.