The Food Corporation of India (FCI) has sold 491,000 tonne of wheat to private bulk buyers such as flour millers and food companies in the 6th e-auction, taking the total grains sold in open market this year to 3.37 MT.
Out of 1.6 MT of wheat offered under the last pan-India e-auction by FCI to bulk buyers, 970 bidders across 23 regions purchased wheat at the average price of `2,214/quintal against the Minimum Support Price (MSP) of `2,125/quintal fixed for the next procurement season (2023-24), beginning on April 1.
“The sale has brought significant effect in cooling down the price of wheat and atta all over the country which is likely to remain stabilised with the future tenders for open sale of wheat,” food ministry said in a statement on Thursday.
Through open market sale, market prices of wheat have declined to close to MSP at present from `3,000/quintal prevailing at the beginning of the year.
Meanwhile, the Roller Flour Millers’ Federation of India on Thursday said prices of wheat and wheat flour (atta) have come down by Rs 6-8 per kg to Rs 23-24/kg range currently in the last two months, following the government’s decision to sell grain in the open market from February 1.
The federation expects a record wheat harvest of 108-110 MT in 2022-23 crop year (July-June).
The record production, in tandem with cooling off prices of wheat, will enable the government to procure 34 MT of the grain in the forthcoming procurement season, the federation said.
FCI has realised around `7,000 crore through selling wheat in the open market so far. The corporation is likely to continue with open market sale of wheat in the non-procuring states till end of the current month.
So far, the government has approved selling 5 MT of wheat to be sold in the open market, which includes 540,000 tonne of grain allocated to state governments and agencies such as NAFED, Kendriya Bhandar and NCCF for selling flour (atta) at a maximum retail price of `27.50/kg.
As on Thursday, the FCI has wheat stock of 10.7 MT while buffer requirement for April 1, 2023 is 7.4 MT. As per the food ministry’s assessment, the wheat stocks held with FCI by April 1, 2023 would be around 9.7 MT against a buffer of 7.4 MT.
Retail wheat inflation rose to 25.37% in February 2023 on year.
Under the open market sale policy, the government allows FCI to sell food grains, especially wheat and rice, at predetermined prices in the open market from time to time to bulk consumers and private traders.
The aim is to boost the supply during the lean season and moderate the prices. The agriculture ministry’s estimate of a record wheat harvest of 112.18 MT for the 2022-23 crop year (July-June) has given a boost to the prospects of the government’s procurement drive for the next marketing season which begins on April 1.