After a rather sluggish start, the Food Corporation of India (FCI) has sold 2.3 million tonne of wheat from its excess stocks through weekly auctions to bulk buyers under Open Market Sale Scheme (OMSS).
Food ministry sources told FE that the corporation is aiming at selling between 6.5 million tonne – 7 million tonne of wheat by the end of current fiscal as sale under OMSS has picked up pace in the last few months.
“We are expecting a sale of more than one million tonne of wheat each month till March, 2016,’ an official said. At the start of the month, FCI has a wheat stock of close to 30 million tonne which far excess of buffer stocks norms.
Besides, the FCI in collaboration with state government agencies would commence procurement of wheat from April 1 for the new marketing season for 2016-2017.
Earlier, the food ministry had given its nod to to FCI for commencing OMSS operations just after the procurement season got over on June 30 in key procuring states of Punjab and Haryana.
However the response to OMSS was lukewarm. Usually, FCI runs OMSS operations during September-March period. The state-run agency had sold 4.2 million tonne of wheat under the scheme in the previous fiscal.
The FCI conducts a weekly auction to sell wheat in the open market using the platform of commodity bourse NCDEX. The government has set a reserve price of R1,500 per quintal plus freight cost to consuming locations.
The High-Level Committee (HLC) for FCI restructuring chaired by former food minister Shanta Kumar in its report earlier this year had observed that “during the last five years, on an average, buffer stocks with FCI have been more than double the buffer stocking norms costing the nation thousands of crores of rupees loss without any worthwhile purpose being served.” HLC had stated that the current system is extremely ad-hoc, slow and costs the nation heavily.
“A transparent liquidation policy is the need of hour, which should automatically kick-in when FCI is faced with surplus stocks than buffer norms. Greater flexibility to FCI with business orientation to operate in OMSS and export markets is needed,” the committee had observed.