According to the secretary of Roller Flour Mills Association (RFMA) S Nithyanandan, farmers in the north supply directly to millers located close by bypassing state taxes and not paying the minimum support price of Rs 550 per quintal. As a result wheat and finished wheatproducts that are coming to the south are prices at Rs 60 to Rs 70 cheaper per quintal. However, with international wheat prices being lower than the price of Rs 740 per quintal fixed by FCI southern zone and with southern mills resorting to wheat imports to counter the dumped stocks, northern millers are worried that sales would be seriously affected.

The southern millers are also unable to procure wheat from the north independently owing to the difficulties of moving goods piecemeal rather than through rakes. The goods often end up at the wrong destinations, or it is alleged that the railway authorities presume that every load of wheat grain is intended for the FCI. Road transport costs are prohibitive.

For the southern mills the 1 lakh tonne of wheat currently needed can be imported at competitive rates as the cost of transporting wheat from Punjab and Haryana is the same as importing wheat from the US or Canada. The cost of getting wheat from Australia is even lower. Imports come at a lower landedcost of around Rs 6,100 per tonne, while the price of the commodity in the domestic market ranges around Rs 7,000 per tonne. While wheat from Turkey is available at a Cost, Insurance and Freight (CIF) price of $120 per tonne, the Australian wheat is available at $140 against the domestic price of $190.

European wheat of 1 lakh tonne is expected to flow into the country out of which the price of French wheat is estimated to be $121.50. The recent depression in container freight rates is beneficial to the southern millers who require smaller quantities and are able to place orders against requirement under the break bulk transport scheme. According to Nithyanandan, every cargo undergoes independent stringent quality control and testing. Prompt shipment from modern terminals with lesser sailing time will continue to facilitate the buyer to plan arrivals in relation to actual demand. In turn value added wheat exports to the west Asian countries and other places would offset imports to maintain the balance inforeign exchange earnings. However, if the government bows to the diktat of the northern mills, southern mills may have to wind up shop, Nithyanandan said.