FCI offloads more wheat, sales price falls, approaches reserve level
By Sandip Das
With the government allocating additional volume of wheat for the open market sale scheme (OMSS) from the Food Corporation of India (FCI) stock, the selling prices of grain declined by 5% to Rs 2172/quintal on Wednesday from the previous week.
The corporation also sold 0.34 million tonne (MT) of wheat to bulk buyers through weekly e-auction, the highest sales since OMSS was launched in June to improve domestic supplies of the grain.
The latest sale price is against a reserve price set of Rs 2,128/quintal and compared with a high of Rs 2,310 realised for the week ended October 26.
Since June, FCI so far has sold 4.81 MT of wheat from its stock through weekly e-auctions.
A week ago, the corporation sold 0.28 MT at an average price of Rs 2301/quintal against the Minimum Support Price of Rs 2275/quintal for the 2024-25 marketing season (April-June).
“After selling 10 MT of wheat in the open market, we may use buffer stock for the purpose of curbing the possibility of rise in prices in coming months,” an official said.
At present, wheat stock with FCI is 18.42 MT, lowest since 2016 against the buffer of 13.8 MT for January 1.
Around 6 MT of the grain is required for supplies under the Pradhan Mantri Garib Kalyan Anna Yojana till end of the current fiscal.
The government is aiming to sell another 5.6 MT of wheat this fiscal which may lead to the grain stock held with FCI precariously close to the buffer, an official said.
The arrival of new crops from April 1 assumes importance to boost the government’s wheat stock.
To enhance the availability of wheat in the open market, the food ministry last week had decided to offer 0.4 MT grain weekly under OMSS from the FCI stock instead of current practice of 0.3 MT to the bulk buyers from December 20.
The government also announced an additional allocation of 2.5 MT to be sold under the OMSS to bulk buyers through weekly e-auction during January-March, 2024 besides 10.15 MT already approved for the current fiscal.
In addition, 84,519 tonne of wheat has been lifted by Kendriya Bhandar, farmers’ cooperatives Nafed and National Cooperative Consumers Federation (NCCF) from FCI at MSP rate for converting into ‘Bharat Atta’ which is being sold to consumers at Rs 27.5/Kg. The corporation has allocated 0.4 MT of grain to these agencies till January 2024.
As per earlier policy, the corporation had been selling surplus wheat to bulk buyers like flour millers only during the lean season (January-March).
Inflation in wheat declined 6.36% last month from 7.6% in October.
As per the agriculture ministry latest data, the wheat sowing this season (2023-224) was marginally less at 24.89 million hectare (mh) against 25.11 mh reported during the same period previous season.
This article has been republished from The Financial Express.