Govt to sell 10 mt of wheat in open market

Written by Sandip Das | New Delhi | Updated: Jul 16 2014, 13:57pm hrs
In a bid to curb price rise, the government has decided to sell wheat from Food Corporation of India (FCI) stocks in the open market.

Sources told FE the food ministry has already moved a cabinet note to sell about 10 million tonne (mt) of wheat through the Open Market Sale Scheme (OMSS) to bulk buyers.

The cabinet in its next meeting is slated to take up the issue of selling wheat to traders and flour millers.

At the start of the month, FCI had wheat stock of close to 40 mt against the strategic reserve and buffer stock norms of 19.1 mt. As the prices have started to move up in the last few days, we will sell wheat in the open market through weekly tendering to bulk buyers after cabinet approval, a senior official said.

Food secretary Sudhir Kumar on Tuesday tweeted 'the government will offer wheat for open market sale from central pool'.

Sources said the wheat will be offered under OMSS at a price consisting of minimum support price and freight to the destinations.

According to Agricultural Marketing Information Network data, wholesale wheat prices at Khanna market moved to R1,435 per quintal on Tuesday from R1,402 per quintal reported just a week ago. Wheat wholesale prices have seen a rise in the last few days.

The OMSS for the current year would be in operation after getting the cabinet note. FCI has offered wheat to traders from September to March 2015. FCI commences the wheat procurement drive for the season from April 1.

Experts said FCI must sell at least 10 mt of rice and wheat in the open market to keep prices in check, particularly when there are reports about deficient monsoon likely impacting foodgrain production.

The government has been selling wheat through OMSS in the last few years in a bid to reduce excess grain stock.