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Govt to sell 2-3 MT of FCI wheat in open market

Fixes price of Rs 2250/quintal

Govt to sell 2-3 MT of FCI wheat in open market
At the beginning of the month, FCI's wheat stock was 18.3 MT against the buffer norm of 13.8 MT for January 1. A year back, wheat stocks were at 37.8 MT.

The government is likely to off-load 2–3 million tonne (MT) of wheat under the Open Market Sale Scheme (OMSS) from the Food Corporation of India (FCI)’s stocks to bulk buyers soon to curb rising prices of the grains.

Sources told FE the FCI has fixed Rs 2250 a quintal (excluding transportation cost) as the OMSS price. The FCI’s open market sales stood at 7 mt in 2021-22 and 2.5 mt in 2020-21.

At the beginning of the month, FCI’s wheat stock was 18.3 MT against the buffer norm of 13.8 MT for January 1. A year back, wheat stocks were at 37.8 MT.

“Proposal to offer wheat to bulk buyers from FCI stock is under consideration,” a food ministry official said and a decision is likely to be taken early next month.

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 (PMGKAY).

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Sources said that as per latest assessment, the wheat stocks held with FCI by April 1, 2023 would be a comfortable 11.3 MT against a buffer of 7.4 MT. This is based on the assumption that the free ration scheme – PMGKAY is not extended beyond December 31, 2022.

According to assessment, if free ration scheme is extended for eight time beyond January 1, 20223, FCI’s wheat stock is projected to fall below the buffer to 9.2 MT on April 1, 2023

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.

The FCI usually follows Minimum Support Price (MSP) and freight cost to the delivery points from Punjab as cost for OMSS.

According to the department of consumer affairs’ price monitoring cell data, the modal retail price of wheat and flour (atta) on Thursday rose to Rs 28/kg and Rs 35/kg, respectively, from Rs 23/kg and Rs 28/kg three months ago.

Wheat retail inflation rose by 17.6% in October 2022 on 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.

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First published on: 09-12-2022 at 01:30:00 am