Food Corporation of India’s (FCI’s) attempt to sell excess wheat stock through open market sale scheme (OMSS) has got a lukewarm response from the traders and bulk buyers.
Sources told FE that due to sufficient availability of wheat stock in the market, the traders are not willing to lift wheat from FCI godowns in Punjab and Haryana at present
The excess wheat stock procured during 2011-12 season was to be sold to shortlisted private bulk buyers by the FCI from Punjab and Haryana depots at a uniform rate of R1,500 per quintal. The government had targetted to sell 8.5 mt of wheat under OMSS by March 2014.
At the start of the month, FCI had a wheat stock of more than 40 mt, which is far above the strategic reserve and buffer stock norms.
As per an FCI official, the registered buyers like flour millers across the country can purchase wheat directly from Punjab and Haryana under OMSS. However, OMSS in other states has been discontinued for the time being.
A food ministry official said the OMSS has not got encouraging response till now. However, a Uttar Pradesh floor miller said that due to an additional transportation cost from Punjab and Haryana, prices of wheat under OMSS is expensive than the prevailing market price.
“We have enough supplies of wheat in the private market at present and the demand for OMSS wheat would rise only by October,” a leading floor miller from Uttar Pradesh said.
The FCI official said that excess wheat stock would enter the market slowly to keep a check on the prices, and private traders would not able to corner a chunk of stocks.
Last month, cabinet committee on economic affairs had approved selling of 10 mt of wheat, out of which 8.5 mt was allocated from Punjab and Haryana. One million tonne of wheat would also be allocated to smaller traders at R1,500 per quintal, plus freight.
Official sources said that the decision to release grains under OMSS would help in containing the prices of wheat and rice, which have firmed up marginally as private traders have bought wheat directly from farmers at