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FCI reduces wheat prices for three regions as open market prices slide
Vijay Trivedi
Mumbai: Open market prices of wheat continued to slide down further even as the Food Corporation of India (FCI) reduced its prices on Friday last for three more regions - western, southern and eastern. The prices for the northern region were lowered last month, while for other regions the prices were lowered last week.The overall zone-wise reduction for FCI wheat from its earlier uniform price of Rs 900 per quintal works out to 17 per cent for the southern region, 20 per cent for the western region and 18 per cent for the eastern region.Accordingly, the latest prices for FCI wheat for the western region is Rs 724 per quintal, down from average of Rs 900 per quintal in June. Against this, the open market price of wheat in Mumbai ruled around Rs 700 per quintal.Traders say the open market price could go down further in coming weeks, what with the Government proposing to acquire about 17 million tonnes of wheat in February 2001.In the southern region, the FCI wheat is priced at Rs 743 per quintal, while in the eastern region Rs 736 per quintal. The price in the northern region was lowered at Rs 650 per quintal last month from Rs 700 per quintal in May.Despite the two rounds of price cutting, the FCI wheat continues to be costlier than the open market price.It is because of this high price, traders say, that FCI has not been able to sell any wheat. FCI Mumbai till recently was quoting Rs 900 per quintal against the open market price of Rs 700-10 per quintal.Obviously, wheat millers in Mumbai have continued their opposition to buy FCI wheat, saying the FCI must further lower its prices to match with the open market prices.Speaking to The Financial Express,Maharashtra Roller Flour Millers Association president, Nandlal Whadhwa said: "We strongly oppose frequent changes in FCI's wheat price policies and its inclination towards Punjab. FCI should offer uniform price to all buyers at Rs 650 per quintal and should not keep any favouritism towards one state."The millers in Mumbai are sourcing their wheat requirements from southern states where the price is around Rs 600-650 per quintal.The figure as on 1st July 2000 state that about 1.45 crore tonnes of rice and about 2.78 crore tonnes of wheat, total around 4.44 crore tonnes of foodgrains is lying in the various FCI godowns since from the last six months with no sale and no off take of wheat through PDS. Hence, the government which is already burdened with a massive stock of about 1.80 crore tonnes of excess foodgrains than the buffer stock will definitely face further serious and acute problems on account of insufficient storage space. The FCI is having stock of wheat since 1995 and incurring heavy expenses of around Rs 172 per quintal for maintenance, administration and prevention. Besides this there are losses by way of reduction in weight and damages to the wheat on various counts. The Government is said to have a stock of 30,00,000 tonnes of wheat in its various godowns and with new crop expected to come by September-October the stocks will rise further. Inevitably, therefore, the market wags have begun debating how long will FCI be able to hold on to its stock which is getting damaged each day. Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.
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