Chennai, Nov. 17 Roller flour mills in South India have begun importing wheat from Australia despite stiff plant quarantine and phyto-sanitary norms. A couple of consignments have arrived and the premium the mills have to pay for sellers to meet the requirements has begun to drop.
“Flour mills in the South have contracted around 10,000 tonnes wheat. A few containers have arrived and they have been cleared by the phyto-sanitary and plant quarantine authorities,” said Mr Pramod Kumar, President of Karnataka Roller Flour Mills’ Association.
The Salem-based Narasu Roller Flour Mills was the first firm to import wheat. “We have imported 250 tonnes of wheat through containers (25 tonnes each). Imports are possible only through containers and not through bulk since sellers have to literally clean the wheat to meet our quarantine norms,” said Mr M.V. Balasubramanian, managing partner of the firm.
Australian sellers are cleaning the wheat using machines to ensure that the shipments meet the rigid phyto-sanitary and quarantine norms.
Mr Balasubramanian said wheat imports were costing $300-315 (Rs 13,900-14,575) a tonne c.i.f Tuticorin. “It will cost an additional Rs 1,500 to get the wheat from the port to our units. The costs are towards gunny bags, unloading from containers, transportation and a fee of Rs 75 a tonne for phyto-sanitary and plant quarantine clearance,” he said.
Cost to the mills
Against this, purchase of wheat from the domestic market will cost the mills Rs 15,400-15,800 a tonne at their gates.
In New Delhi, wheat (dara), used by the mills, dropped Rs 100 a tonne to Rs 14,000-14,050 a tonne.
“One, not much wheat is available in the domestic market with traders or farmers. Two, whatever wheat is available has 5-6 per cent infestation,” said Mr Balasubramanian.
Mr Kumar, who manages a couple of roller flour mills, said his units had bought 50 containers.
“Forget the price factor, we are getting premium wheat at a competitive price,” he said.
“The other major factor in importing wheat is guaranteed supply. Prices in the domestic market are undergoing change everyday that supplies are unreliable,” said Mr Kumar.
Mr Balasubramanian said one hurdle, though, was that it takes a month to get the wheat consignments. “This is because wheat has to be cleaned. It is the major reason why we are unable to import in bulk,” he said.
When Narasu’s first opted to import the grain, they had to pay a premium of $25 a tonne since the sellers were pessimistic if the deal would go through due to the stiff norms set by the Centre. “But once our shipment got cleared, many have come forward to sell. The premium has also dropped to $7-8 now,” he said.
The Roller Flour Mills’ Federation of India has urged the Centre to ease the plant quarantine norms for import. In fact, it has asked for restoration of the order passed by the Government in 2006 to facilitate bulk imports when wheat production dropped sharply.
The order lapsed in March this year and the mills have sought its extension till March. Wheat imports have taken place despite record production of 80.58 million tonnes this year.
“The only one holding wheat stocks in the country currently is the Government. It has nearly 27 million tonnes in the buffer stock,” said industry sources.
Govt’s sale plan
The Government had planned to sell nearly one million tonnes from its stocks in the open market. Last month, it planned to sell five lakh tonnes in the open market to bulk users such as flour mills at Rs 1,379.70-1,728.23 a quintal depending on transport charges.
For this month, the mills would have to pay an additional Rs 17 a quintal towards warehouse and interest charges.
However, no decision has yet been taken on the open sale forcing mills to look at the option of imports.
On the other hand, the Centre has set a target of 82 million tonnes for wheat production next year.
Source : Business Line