Just a day before the start of annual wheat procurement by state agencies for the 2010-2011 season, the government has decided to extend the Open Market Sale Scheme (OMSS) for wheat to bulk consumers by another three months.
However, as earlier reported by FE, the sale would be discontinued in key growing states of Punjab, Haryana, Rajasthan, Uttar Pradesh and Madhya Pradesh from Thursday to prevent any possibility of the sold wheat getting back into the procurement system due to marginal difference in prices.
These states contribute more than 80% of the total wheat purchased by the central government.
According to official sources, till date, Food Corporation of India (FCI) has sold 1.2 million tonne of wheat to bulk buyers out of the total allocation of 2.08 million tonne.
However due to infrastructure constraints, wheat under OMSS allocated to states, which was over and above the allocations made for public distribution system, could not gather momentum.
Out of the allocation of 2 million tonne under OMSS, states have till date only 3.93 lakh tonne.
The government had allocated 4.2 million tonne of wheat to be sold under OMSS during October 2009 – March 2010 to bulk buyers and also to the states. OMSS was launched in October 2009 to sale surplus wheat stocks to bulk consumers for controlling rising prices.
Though initially, the sale of wheat for bulk buyers was scheduled to start from October, but the process got delayed because of low demand from flourmill owners who wanted the government to reduce its sale price below the prevailing market rates.