Delhi, Maharashtra wheat millers rue cap

MUMBAI: Wheat millers in Maharashtra and Delhi fear that the government’s move to impose stock limits may shift business to other states.

“Since we are unable to offer a large time, price band we can see our buyers shifting to states such as Madhya Pradesh and Rajasthan where there are no stock limits,” said Ajay Goyal, a Maharashtra-based wheat miller. He said after imposing stock limits, the government is not guaranteeing the availability of wheat through FCI. “It makes sense to have stock limits in the producing states and not in consuming states,” he said.

When contacted, secretary of Roller Flour Miller Federation of India, Veena Sharma said that stock limits are affecting the economic viability of a mill. “It is not easy to meet the long term commercial commitment in absence of supplies. Also, we cannot get a good bargain in short term contracts,” she said.

Once the procurement season ends the millers have to make efforts to purchase wheat which requires time and with 15 days of stock limits it becomes difficult, she said. In Maharashtra there is a stock limit of 30 days miller’s capacity whereas in Delhi it is 15 days.

However, Prafull Jain from a flour mill in Madhya Pradesh said that contracts are being entered with the millers from their state in large numbers but it is more on account of good quality product backed by good wheat quality.

Though none of the southern states have imposed stock limits, K S Kamala Kannan, a wheat miller from Tamil Nadu, said that stock limits if imposed will hamper their plan to consistently provide quality processed products as that requires buying good wheat and storing it for a long time.

Haryana Flour Millers Association president C P Gupta said that over a period buyers from Delhi and Maharashtra millers are likely to shift to Haryana or Rajasthan but currently it is not happening. Trader Pawan Agrawal feels that the mills in Maharashtra or Delhi anyway don’t have enough space to stock their wheat and now they have scaled down their stocks as prices are 15 to 20% higher.

According to him, stock limits will affect 5-10% of the millers business. The Central government had earlier extended its notification on empowering state governments to impose stock limits on wheat and pulses to prevent speculation.