Karnataka roller flour mills are pushing the Food Corporation of India to triple weekly wheat allocations to 3 lakh tonnes to address a severe supply crunch. Currently, mills receive only 17% of their required supply, driving up local prices. This shortage is increasing raw material costs for food processors, putting pressure on profit margins during the festive season.
The Karnataka Roller Flour Mills Association has formally approached the Food Corporation of India (FCI) with an urgent request to increase the weekly allocation of wheat under the Open Market Sale Scheme. The association, representing over 40 processing facilities across the state, warns that current supply levels are insufficient to meet manufacturing needs for the upcoming peak festive season.
Data from the latest e-auction held on October 21 underscores the severity of the supply chain bottleneck. Karnataka mills were able to secure only 6,000 tonnes of wheat against a weekly requirement of 34,600 tonnes. This allocation covers less than 17% of the total industry demand, forcing processors to navigate a restricted market. The association is now advocating for the national weekly allocation to be raised to 3 lakh tonnes to stabilize domestic availability before Diwali.
The supply constraints have already triggered a sharp rise in wheat prices. Between October 14 and October 21, auction winning prices for wheat varieties from Madhya Pradesh, Rajasthan, and Haryana surged by approximately 8%. In the Bengaluru market, this inflation is evident, with prices for Madhya Pradesh-origin wheat climbing to ₹3,400 per quintal, while Rajasthan-origin wheat has reached ₹3,600 per quintal.
This inflationary trend in raw material costs is a critical factor for the food processing sector. For manufacturers of flour-based products, wheat is the primary input. When these costs rise sharply, companies face potential pressure on profit margins. If manufacturers cannot fully pass these costs on to consumers during the high-demand festive period, their profitability may come under pressure. Investors tracking the food processing industry may monitor whether these supply constraints persist, as higher input costs often impact operating margins.
Beyond the volume of grain, the association has also requested a strategic shift in the FCI’s allocation policy. Millers are specifically asking for more Punjab-origin, non-durum wheat. They have noted that the current supply mix often includes durum wheat, which possesses a distinct yellow tint that is unsuitable for many food-processing applications. The industry argues that adjusting the grain composition and increasing total volumes is the only viable method to calm the market before early November.
The next important update for stakeholders will be whether the FCI adjusts its allocation strategy or grain variety mix in response to these requests. Stable and adequate supply remains essential for food processors to manage costs and production schedules effectively during the festive months.