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Breads, Biscuits, Rotis may get costlier as flour prices high, govt scheme not announced yet

kem haris 3 years ago 3 min read

Bread, biscuits, and rotis tend to see the price increase from next month with high wheat flour prices (ATTA) and as an Open Market Sales Scheme (OMSS) for wheat for the current year has not been announced. Food Corporation of India (FCI) sells wheat under OMSS from time to time to increase food supply, especially wheat, during the lean season.
Retail Prices All-India wheat from RS 32.78 per kg on Saturday, 9.15 percent higher than the price (RS 30.03 per kg) a year ago, according to data reported by the Department of State Civil Inventory to the Ministry of Union Union consumers affairs, food and public distribution.

Among the four Metro cities, the average retail price of wheat flour is the highest in Mumbai at RS 49 per kg, followed by Chennai (RS 34 per kg), Kolkata (RS 29 per kg) and Delhi (RS 27 per kg).

Also, the purchase of wheat by the milling industry from the FCI can vary from the amount that can be ignored to around 7-8 million tons in a year, depending on the position of wheat in the market.

During 2021-22, the wheat processing industry bought seven million tons of food from the government. This year, the industry must buy 100 percent wheat from open markets if the government does not declare the continuation of the OMSS policy.

Meanwhile, soap, shampoo, biscuits, and noodles face the pressure of price increases due to Indonesia’s prohibition on exports of palm oil. Palm oil is used as a raw material for various industries to produce products ranging from soap, shampoo, noodles and biscuits to chocolate. The deficiency in the supply of palm oil will push the price, which, in turn, will increase the cost of input this product and therefore the price.

India is the largest importer of vegetable oil in the world and is the largest importer of palm oil and soybean oil. India imports more than 13.5 million tons of oil that can be eaten every year. From this, 8-8.5 million tons (around 63 percent) are palm oil. Now, nearly 45 percent came from Indonesia and the rest from Malaysia which were close together. India imports about 4 million tons of palm oil from Indonesia every year.

Apart from this, the increase in input costs due to high food inflation and fuel prices also forces fast service restaurants such as dominoes, bars and cafes to raise prices by up to 15 percent. The previous industrial executive said their raw material costs had increased to 30 percent in the last three months.

Inflation in March jumped mainly due to an increase in food. Inflation in the food basket during the month reached 7.68 percent, higher than 5.85 percent in February.

Core inflation, which does not include food and fuel components, also rose to a height of 10 months 6.29 percent in March. Food inflation rose to 7.68 percent in March, against 5.85 percent in the previous month. The surge in a food basket was caused by an increase in oil and fat prices, which rose 18.79 percent of the years-year-year in March.