FCI to offload wheat to check prices | The Financial Express

FCI to offload wheat to check prices

Close to 3 MT of grains to be sold in open market despite low stocks

FCI to offload wheat to check prices
The actual quantity of wheat offered to millers and the food industry would be decided soon. The FCI usually follows Minimum Support Price (MSP) and freight cost to the delivery points from Punjab as cost for OMSS.

The Food Corporation of India (FCI) is likely to offer 2-3 million tonne (mt) of wheat under the Open Market Sale Scheme (OMSS) to bulk buyers to curb rising prices of the grains in the current agriculture marketing year (2022-23), despite the stocks being just marginally above the buffer. The FCI’s open market sales stood at 7 MT in 2021-22 and 2.5 MT in 2020-21.

The corporation had earlier stopped sale of wheat in the open market from its stocks for the first time more than a decade in view of a sharp drop in procurement in 2022-23 rabi marketing season and additional allocations of the grain under the Pradhan Mantri Garib Kalyan Anna Yojana.

Sources told FE that as per latest assessment, the wheat stocks held with FCI by March 31, 2023 would be a comfortable11.3 mt against a buffer of 7.4 mt. “We are considering a proposal to offer wheat to bulk buyers from our stocks,” a food ministry official told FE.

However, wheat will be offered to small flour millers across all the depots in smaller quantities while in the previous years, when the grain used to be offered to large buyers from depots in Punjab.

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“We would like to intervene at the regional levels by selling wheat stocks across FCI depots,” an official said.

The actual quantity of wheat offered to millers and the food industry would be decided soon. The FCI usually follows Minimum Support Price (MSP) and freight cost to the delivery points from Punjab as cost for OMSS.

In 2021-22, FCI had sold around 7 mt of wheat under OMSS to flour millers and food companies. As on October 1, wheat stocks with the FCI and other government agencies were at 22.7 mt, against a buffer of 20.5 mt. A year back, wheat stocks were at 46.8 mt.

Wheat prices rose by 17.4% in September 2022 compared to previous year. The wheat output in the 2021-22 crop year (July-June), as per the agriculture ministry, has declined by around 3% on year to 106.8 mt because of heat waves during the flowering stage of the crop in March.

Due lower production and higher global demand, FCI’s procurement in 2022-23 season fell by more than 56.6% to only 18.8 mt against 43.3 mt purchased from the farmers in the previous year.

Due to lower wheat stocks, the rice component of the free ration scheme was enhanced by 80% effective May. The government placed curbs on exports of wheat in May, even as the global markets looked very remunerative to exporters.

According to the department of consumer affairs’ price monitoring cell data, the modal retail price of wheat last week rose to Rs 27/kg from Rs 25/kg prevailed a month back.

The mandi prices are currently ruling around Rs 2,400-2,500/quintal against the MSP for the current season of Rs 2015/quintal.

The wheat procurement for 2023-24 rabi marketing season would commence from April 1 and would continue till the end of June. It is expected to boost wheat stocks of FCI. The MSP for wheat has been hiked by more than 5% to Rs 2125 per quintal for the next marketing season in comparison to current season.

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First published on: 31-10-2022 at 02:15 IST