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Govt can save Rs 9,000 cr if wheat rates under OMSS are reduced by Rs 500/qtl: Flour millers

Govt can save Rs 9,000 cr if wheat rates under OMSS are reduced by Rs 500/qtl: Flour millers
New Delhi, Jul 15 (PTI) Flour millers on Wednesday urged the Centre to reduce wheat rates offered to bulk users under the Open Market Sale Scheme (OMSS) by Rs 500/quintal, which would help dispose of 60 lakh tonnes surplus stock and save carrying cost of around Rs 9,000 crore. Â Â

The Roller Flour Millers Federation of India (RFMF) promised it will pass on the reduced prices to consumers while also pitching for GST exemption for fortified wheat flour. Â Â

Currently, state-run Food Corporation of India (FCI), sitting on a huge stock, is offloading wheat to bulk consumers like flour mills under the OMSS at a reserve price of Rs 2,135 per quintal. Â Â

"The OMSS wheat rates offered are much higher than the open market prices and even imported rates. If OMSS rate is reduced by Rs 500 per quintal to Rs 1,635, flour millers can lift around 60 lakh tonne of wheat from the FCI," RFMF President Sanjay Puri told reporters at a digital press conference. Â

FCI will be able to earn Rs 9,810 crore from the sale of 60 lakh tonnes at a discounted rate of Rs 1,635 per quintal. At the same time, it will be able to save Rs 9,085 crore in terms of carrying cost plus interest on the same quantity of stock, he claimed. Â Â

Puri said reduction in OMSS rates will be passed on to consumers who will be able to get wheat and wheat-based products at a cheaper price amid the COVID-19 crisis. Â Â Â

As against the government''s offer of 150 lakh tonnes, only 5.62 lakh tonnes of wheat have been lifted under the scheme because of the differential between open market and OMSS rates, the federation said. Â Â

Stating that the government should review and rationalise the wheat price policy, RFMF''s Vice President Pramod Jain said OMSS wheat rate after inclusion of freight charges and taxes comes to Rs 2,500 per quintal for delivery in Tamil Nadu, which is higher than that for imported stock. Â Â

Imported wheat at Tuticorin port after inclusion of 40 per cent customs duty quotes at Rs 2,200 per quintal, while the rate of domestic wheat shipped from Gujarat via the sea route is even less at Rs 2,150 per quintal, he added.

Currently, FCI is holding a stock of 811 lakh tonnes of wheat and rice as against a storage space of 789 lakh tonnes. With the ensuing kharif crop, there is an urgent need to create covered space and reduce the cover and plinth (CAP) storage. Â Â

"Stock offloading channels have to be in place like OMSS, export of value-added wheat products. It will supplement the government''s efforts to reduce the stock piling this year due to good harvest," the federation added. Â

Flour millers had last purchased 70-71 lakh tonnes of wheat under OMSS in 2015-16 and 2018-19 fiscal years. Last year, they bought only 27.85 lakh tonnes. PTI LUX ABM ABM

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