Wheat grain is sent to the states as per the latter's requirement. Orders are placed by the state to the Centre for supplies which is routed through the Food Corporation of India (FCI).

The Tamil Nadu roller flour mills require 50,000 tpm of wheat grains for conversion to atta, sooji, maida and bran to meet open market demand.

However the state government has asked for 40,000 tonnes (for January) of which only 30,000 will be given to the flour mills and 10,000 for PDS supplies and private biscuit makers and bakers.

Even as orders have been given for lifting the January stock by February 15 by FCI, (or it would lapse into the central pool) the state is yet to pass the release orders to the millers, without which stocks cannot be lifted.

The bureaucratic delays torelease the quota is taking a toll on the roller flour mills paving the way for an artificial shortfall.

If this is not enough, the Tamil Nadu civil supplies department is making merry on the PDS quota. As wheat is not a preferred item for the buyers in PDS (who are rice eaters), the amount allotted by the state is inevitably sold back to the flour mills, who anyway do not have enough. As the PDS purchasers do not purchase too much of maida and sooji either, these are also sold back to the flour mills.

In Tamil Nadu the open market prices for atta, sooji, maida and bran are fixed depending on supplies and inflows of the finished products from Delhi - where the local millers are at a disadvantage. Open market prices also crash in anticipation of PDS stock inflows of the previous month sold back to the mills.

Margins for the roller flour mills are wafer thin, the Tamil Nadu Roller Flour Mills' Association secretary N Sivanesan said. Northern millers had the advantage of buying wheat directly from farmers,did not pay for gunny bags or taxes and preference was given by the railways to reach these goods to the markets (on account of perishable nature) to supply of wheat grains.

These are sold to traders under fictitious registrations in Pondicherry where no sales tax is levied. Around 3,680 bags of 90 kg each are landing in Tamil Nadu every day, amounting to a dumping of approximately 3200 quintals.TN millers are therefore forced to keep a hawk's eye on prices despite operating at low capacities.

To add more nails to the coffin, the TN commissioner for civil supplies fixes the price of custom milled grain to be sold back to the roller mills, which would otherwise lapse into the central pool. Typical bureaucratic hindsight ensures that these prices are far higher than the ruling open market prices.

Mills are compelled to buy back these products to hold market share. otherwise stocks get released to traders in the black market. ``We find it difficult to explain to the customer why one atta costs more thananother particularly when there is no quality difference,'' said Sivanesan. While this has been the scene for some months (the December allotment was only 20,000 tonnes for the mills), the millers are becoming desperate. Many other states take their total requirements of stock for the months December through March. The Tamil Nadu government can also do the same, the association feels.