The Government is worried about large-scale hoarding, in which wheat flour traders and millers are holding huge stockpiles of wheat and wheat flour waiting for prices to rise, according to consumer affairs, food and public distribution secretary T Nandkumar. If prices of wheat and wheat flour rise, the Government may intervene by removing the 37 per cent import duty on wheat flour. “Some millers are sitting on stocks as large as 1 lakh tonnes,” he said, adding that “only traders and millers will benefit if prices are allowed to rise now”.

The earlier proposal to remove the import duty on wheat flour seems to be a move to pressurise such domestic players to release their stocks. Clarifying the Government’s position on wheat flour imports, Nandkumar said, “We were considering removal of the 37 per cent import duty on wheat flour since it did not make sense to have it while wheat has a zero import duty.”

But this proposal is currently in “cold storage”, he added. “The move was aimed at enabling private players to import wheat flour as it was felt that some south Indian millers were trying to push up the market prices,” he said. “The Government, however, has no plans to import and distribute wheat flour on its account,” he said, citing lack of handling and storage capacity for wheat flour.

Millers, however, claim that they are holding stocks only to meet their existing contractual commitments, as there may be no open sale of wheat by Food Corporation of India (FCI) during the lean season this year. “The food secretary has obtained written stock declarations from all millers who are holding more than 50,000 tonnes and, hence, there is no possibility of hoarding without the Government’s knowledge,” said Roller Flour Millers’ Federation of India president Datta Raj.

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