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However, during the last many years when the country had bumper harvests of wheat year after year and our warehouses were not able adequately store the millions of tonnes of wheat procured during two crops each year, resulting in more than 15 to 20% of the stocks getting lost, due to damage, pilferage, age, rodents and lack of scientific storage space. While the Govt attempted to allocate higher quantities through PDS particularly for the BPL population, the excess stock of millions of tonnes of wheat remained in the warehouses. It is, however, a paradox that all these years, prices of wheat flour have been continuously increasing.

Ironically when our Federation suggested in 2000 that wheat should be productively used by industry like Biscuit, Bread, Bakery products etc, and for that matter, special allocation he made to such wheat consuming Industries, the Govt (Ministry of Food & PDS) was not inclined to accede to our plea. h is however, gratifying that the Ministry of FPI has recognized the genuineness of the plea of the Biscuit industry. particularly when the FCI, was allotting subsidized wheat to Millers-exporters for export of wheat and wheat products i.e. Flour, Atta Sooji/Rava etc. The food product industry represented by FBMI and the An India Bread Manufactures' Association (AIBMA) have recently submitted comprehensive Notes to the Ministry of Food Processing Industries, GOI dwelling in detail on the mechanism of screening, scrutinizing and allotting wheat to the biscuit and bread manufacturers in the organized sector with a view to enable them to achieve better utilization of installed capacities, generate wore employment by increased production of these food products which are mainly consumed by common man FBMI has also offered to act as nodal agency to screen the requirements of wheat by biscuit units, based on certain criteria relating production, sales etc and to take further steps to ensure proper utilization.

The crop harvest of 2002-03 is 70.10 million tonnes as compared to 71.81 million tonnes in the previous year. The fall in production took place mainly in Rajasthan, MP and parts of UP. However, as production in the two main States of Punjab and Haryana has not dipped, lower production will not translate into lower purchase by FCI and State Agencies. As on April 2002, FCI was holding stock of 16.00 million tonnes as compared to 20 million tonnes last year. Procurement during 2003 is estimated at 190.25 lakh tonnes, compared to 206.30 lakh tonnes during last season, by FCI and other State Agencies. Govt. of India raised the Minimum Support Price for wheat from Rs 620/- to Rs 630/- per qtl. The procurement by private sector in Punjab and Haryana has been lacking enthusiasm, mainly due to high incidence of Mandi Taxes and levies totaling about 10% of purchase price imposed whereas private procurement has been more active in UP, MP and Rajasthan where Mandi Taxes etc are rather low. On the other hand, OMSS Price of wheat announced by FCI w.e.f. 1st July 2002, was as below :-

North Zone : Rs 685/- per qtl.
South Zone : Rs 742/- per qtl.
West Zone  : Rs 733/- per qtl.
East Zone   : Rs 734/- per qtl.

Wheat prices in the Mandi at the time of Report, is @ Rs 675/- to Rs 680/- per qtl. Wheat flour prices have been swinging up and down as on 30 April 2003, wheat flour is selling @ Rs 685/- to Rs 695/- per 90 kg gross (ex-Mill). However, media reports indicate that FCI has suspended OMSS for May & June 2003.

The periodic fluctuations and hike in flour prices as also increase in exports of atta, maida, suji etc during the year 2002 adversely impacted biscuit units insofar as availability and prices of flour were concerned FBMI inter acted with the Ministry of Food, Consumers Affairs & PDS, Govt. of India, as well as with the Ministry of Food Processing Industries and urged that Government to restrict exports of wheat products, release adequate quantity of wheat in the OMSS and also evolve special direct allotment of wheat to biscuit manufacturers at subsidized prices. The President, FBMI, attended and interactive session with Shri R D Kapoor, Secretary, Ministry of Food & PDS, on 17th July 2002 on wheat and wheat products, during which the Association reiterated our plea for subsidized allotment of wheat to biscuit industry at prices fixed for allotment for exports of wheat products.


India maintained its position as the largest producer and consumer of Sugar in the world. During the year 2001-02, the total output was 185.80 lakh tonnes (compared to 180.98 lakh tonnes in 2000-01). As a result, the Government decontrolled Sugar effective from 1.4.03. The sugar mills will be able to sell 90% of their output in the open market as the Govt. decided to do away with 15% levy during 2002-03. The cabinet, in February 2003, also decided to source sugar from open market, if needed, for PDS to BPL families.

The Government has fixed the levy sugar quota at 18%

Vanaspati (Veg. Oil)

The Union Govt. increased the incidence of CENVAT on Vanaspati, by changing over to advalorem duty in place of the earlier duty on percentage basis. This has resulted in hike in prices of vegetable oil and has affected biscuit manufactures by way of increased costs in this input. On the other hand, a steep across-the-board increase in import duties on crude and refined vegetable oil.

Price Hike in Wheat Flour

During the year under report, the prices of wheat flour witnessed steep hike in various states, mainly Uttar Pradesh, Rajasthan, Haryana, Delhi, Kerala, Karnataka, Tamil Nadu, Andhra Pradesh, West Bengal, Orissa, Bihar, Maharashtra, Gujarat, etc, on account of in adequate release of wheat by the Food Corporation of India under the Open General Sales Scheme.

The Federation had earlier requested the Ministry of Food and PDS, Govt. of India to allot subsidized wheat to biscuit manufacturers for the purpose of promoting exports and production of biscuit. FBMI also submitted a Memorandum to Shri Sharad Yadav, Hon’ble Union Minister for Food and PDS seeking immediate action to ensure availability of adequate quantity of wheat in the open market through FCI and also to issue orders for special allotment of wheat to biscuit industry for the purpose of exports, as already agreed by the Government and to extend such allotment for encouraging domestic production of biscuit.

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