After OMSS damp squib, Centre allocates excess wheat to states

Written by fe Bureau | New Delhi | Updated: Sep 26 2013, 19:41pm hrs
Owing to the lukewarm response to its Open Market Sale Scheme (OMSS) for excess wheat stocks, the government has decided to allocate the foodgrain to the state-level depots of Food Corporation of India (FCI).

Key consumers, including Uttar Pradesh, Madhya Pradesh, Kerala, Tamil Nadu, Karnataka and Maharashtra, have been allocated 2 lakh tonne of wheat each at a base price of R1,500 per quintal along with the freight incurred by FCI.

Food ministry sources told FE that OMSS wheat would be available at R1,582 per quintal in Uttar Pradesh, R1,617 per quintal in Madhya Pradesh, R1,780 per quintal in Kerala, R1,725 per quintal in Tamil Nadu and R1,698 per quintal in Andhra Pradesh.

The government had earlier targeted sales of 8.5 million tonne wheat under OMSS at R1,500 per quintal from Punjab and Haryana depots during 2013-14. The wheat stocks from the 2011-12 season would be sold under OMSS till March 2014.

An FCI official told FE that only 11,000 tonne of wheat has been sold through OMSS till now.

OMSS wheat would be available across states as FCI's freight cost would be lower than that incurred by private traders as the corporation transports foodgrain in huge quantities, the official said.

Meanwhile, food minister KV Thomas at the AGM of Roller Flour Millers Federation on Wednesday said that the government has decided to set up a Committee of Secretaries (CoS) to review the reserve price of wheat and freight charges regularly for OMSS, keeping in view the fluctuations in wheat prices. The decision taken by the CoS will be ratified by the group of ministries, Thomas said.

During 2012-13, more than 6 mt of wheat was sold under the scheme through tenders floated by FCI.

At the start of the month, the foodgrain stock with FCI was 58.93 million tonne. Of this, wheat accounted for 38.3 mt and rice 20.5 mt.

The decision to release foodgrain under OMSS is likely to help contain prices. Both wheat and rice prices have gone up as private traders have bought wheat directly from farmers at prices higher than the minimum support price.

Due to rising private purchases from farmers, FCI could procure only about 25 mt during the 2013-14 marketing season against a target of 33 mt.