The Hindu : Tamil Nadu News : `Allow duty-free wheat import to stabilise price'

Online edition of India's National Newspaper
Tuesday, May 17, 2005

Tamil Nadu

Tamil Nadu

`Allow duty-free wheat import to stabilise price'

Special Correspondent

Roller Flour Mills Association plea `An import duty of 50 per cent with certain restrictions stopped millers in the South from going in for imports'

CHENNAI: The Tamilnadu Roller Flour Mills Association has submitted a memorandum to the Union Minister of Food, Sharad Pawar, urging the Centre to allow duty-free import of wheat to stabilise its price in the local market.

The memorandum pointed out that in the current season, wheat arrivals and procurement by official agencies were much less compared to last year. In the current "rabi" season, the arrivals in various markets across the country were 148.1 lakh tonnes compared to 158.22 lakh tonnes during the same season last year. Moreover, progressive procurement by the Food Corporation of India and other State agencies was lower at 139.2 lakh tonnes against 149.61 lakh tonnes in the previous year.

The reduced arrivals were due to prolonged rain and hailstorms in wheat growing States. This coupled with the increase in freight rate by Railways would lead to increase in the open market price of wheat. On the other hand, the international price was likely to come down in view of the weak demand.

The widening price difference between the domestic and international markets reached such an extent that it looked cost-effective for consumers in the South to import wheat instead of purchasing it from the north. But the import duty of 50 per cent with certain restrictions was restraining the millers in the South to go for import.

The association pointed out that the roller flour mills in the South were now transporting wheat from the North to meet their requirement.

For them, increase in the price of local wheat had increased their input cost, which was likely to be reflected in the price of wheat products during the festival season.

Taking these factors into consideration, the Government should allow duty free import of wheat not only to stabilise the price in the local market but also to help millers in the south to get the grain at a reasonable price, the memorandum added.

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