FCI was given in principle permission to sell the foodgrain in the open market late last week by the food ministry, sources said.

Wheat would be sold only to `genuine' millers at Rs 690 per quintal in FCI's north zone, Rs 747 a quintal in south zone, Rs 725 a quintal in west zone and at Rs 748 a quintal in east zone as against the existing open market price of Rs 550 to 860 a quintal.

When contacted FCI managing director SS Dawra told PTI that the issue price of the wheat has been fixed by the food ministry and the corporation would `straightaway' start sale to the millers.

``We have been instructed by the ministry to sell at prices fixed by it, which is above the prices at which the foodgrain is sold to those above the poverty line (APL) under the public distribution system (PDS),'' he said.

FCI had been pressing the food ministry for its permission to dispose of the huge stocks of wheat which was estimated to be 30 lakhs more than the stipulated buffer stock norm of 40 lakh tonnes as on April 1.

As per the buffer norms revised on October 31 last, the country is estimated to have a buffer stock of 208 lakh tonnes as against the requirement of 158 lakh tonnes including wheat stocks of 40 lakh tonnes and 118 lakh tonnes of rice stocks.

The stocks were expected to be above the buffer norms in view of a record foodgrain production.

While the corporation would sell a minimum of 10 tonnes to a miller, Dawra said the maximum quantity to be sold to a miller would depend on the production capacity of the mill. Asked whether the sale at the prescribed prices would make up the cost incurred by FCI in procuring and storing, Dawra said ``though we will not be recovering the economic cost of the product, we would be able to save a lot of public money which otherwise would have been spent on servicing interest of the cost involved in maintaining such a huge stock.''

FCI managing director said the corporation was hopeful of finding enough buyers for the quantity it plans to sell as out of a total arrival of 72 lakh tonnes of wheat in the mandis across the country only about two lakh tonnes were procured by traders, leaving the rest to state-owned agencies.

The delayed nod from the food ministry to FCI comes in the wake of reports that Indian wheat would not be price competitive in the international market due to the higher domestic prices sustained by the statutory minimum support prices (MSP).

Aided by increase in area of cultivation and timely sowing, India's foodgrain production for the current financial year is expected to be a record 200.8 million tonnes including a record wheat crop of over 70 million tonnes.

As per the estimate of the agriculture ministry, wheat production is expected to be 7.06 crore tonnes against 6.59 crore tonnes last year.The expectation is in view of increase in area of cultivation to 2.71 crore hectare from 2.67 crore hectare last year. The output is also likely to be higher in view of at least 70 per cent of the sowing being done in time.

Wheat procurement by FCI and various state government agencies during the current year had touched 70 lakh tonnes till Thursday last as against 21 lakh tonnes last year.

FCI has estimated wheat procurement levels to go up to 13.7 million tonnes as against 12.6 million tonnes last year.

Dawra said in view of the expectation of a record procurement by the corporation, FCI would consider seeking permission of the food ministry to further unload the stock in the open market.

``We will ask the ministry to allow us to further offload the stock after studying the post-procurement season,'' he said.

FCI has so far sold a quantity of five lakh tonnes of wheat in the open market through state governments.