The use of electronic auctioning instead of tendering process for selling excess wheat stocks by Food Corporation of India (FCI) seems to be taking off.
FCI sold 750 tonne of wheat in Delhi on Wednesday through e-platform of National Spot Exchange Ltd (NSEL) promoted by Financial Technologies group.
The wheat was sold at Rs 1,260 per quintal in Delhi against a base price of Rs 1,254 per quintal because of good demand in the open market. FCI had allocated 30,000 tonne of wheat under the Open Market Sale Scheme (OMSS) for Delhi market, to ensure better supplies and easy offloading of its excess stocks.
FCI has decided to conduct the e-auction every Wednesday for the next few weeks for selling all the allocated stocks.
FCI and NSEL had earlier in the year signed an agreement under which a portion of government?s excess stocks of wheat was to be told through the e-auction process. In the first auction, 1,200 tonne of wheat was sold through the e-auction process in Delhi. ?There has been huge interest for e-auction as it cuts down on transaction time and cost for the bulk buyers,? Anjani Sinha, Chairman and Managing Director of NSEL told FE.
Unlike the tendering process, the payment, delivery and refund is done within 2-3 days of the auctioning process.
Bulk buyers would have to bid for minimum quantity of 100 tonne and a maximum of 1,000 tonne in the e-auction.
FCI was to launch e-auction of wheat in Delhi, Karnataka, Andhra Pradesh and Haryana early this year on a pilot basis. But the corporation could start the process in only Delhi in February. The government has allocated 2 million tonne of wheat under OMSS, which has been extended to September 30.
Till now, out of the allocation of 2.8 million tonne of wheat to the bulk buyers under OMSS, FCI has sold 1.2 million tonne of wheat. With FCI procuring a record stocks of wheat during last three years, the corporation is holding on far excess wheat stocks beyond the strategic reserve and buffer stocks norms.
Meanwhile, sources told Fe that FCI is also considering a proposal to offload coarse grain such as maize, bajra, jowar and ragi through the e-auction process to cut down on time and also to bring down the cost.
This year, FCI has already lifted 3.4 lakh tonne of coarse grain of which major share is that of maize (2.6 lakh tonne) followed by bajra (77,646 tonne) and jowar (588 tonne).