Close to 0.9 million tonne (MT) of wheat was sold in the open market by the Food Corporation of India (FCI) in the first weekly e-auction held on Wednesday.
According to a food ministry statement on Thursday, a quantity of 0.88 MT of wheat was sold through e-Auction from FCI’s stocks on e-auction held across 22 states. “More than 1100 bidders participated in the first e auction of wheat,” the ministry said.
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Bidding in Rajasthan will be held on Thursday.
The corporation had offered 2.2 MT of wheat out of 2.5 MT of grain earmarked for e auction from the central pool stocks to bulk buyers such as flour millers under Open Market Sale Scheme (OMSS).
To curb the sharp spike in domestic prices of wheat, last month, the government decided to liquidate 3 MT of wheat from the FCI stocks in the open market through a weekly auction till the middle of March.
Wheat retail inflation rose by 22.2% in December.
At present, the FCI has wheat stock of 15.7 MT against the buffer norm of 13.8 MT for January 1. As per the food ministry’s assessment, the wheat stocks held with FCI by April 1, 2023 would be a comfortable 9.7 MT against a buffer of 7.4 MT.
The FCI has fixed base price of Rs 2350/quintal, excluding freight costs from the depots for the weekly wheat auctions commencing February 1. The minimum support price (MSP) of wheat for 2022-23 marketing season is Rs 2015/quintal.
FCI’s economic cost of the grains which includes MSP, storage, transportation and other costs is of Rs 2654/quintal.
“Offloading of 3 MT wheat in the market through OMSS within a span of two months through multiple channels will have wider reach as well as immediate impact on the soaring wheat and Atta prices and will help containing the rising prices and will bring much relief to the common man,” according to the food ministry statement.
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While 2.5 MT of wheat would be sold through e-auction by March 15, 2023, 0.3 MT of wheat will be offered to government PSUs, corporates, Kendriya Bhandar and Nafed under this special scheme, subject to the stipulation that the buyer will convert wheat to atta and offer it to the public at a maximum retail price of Rs. 29.50/kg.
The state government agencies will be offered 0.2 MT of wheat to be distributed at retail levels.
The FCI had earlier stopped the 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 the 2022-23 rabi marketing season and additional allocations of the grain under the free ration scheme.
The FCI’s open market sales stood at 7 MT in 2021-22 and 2.5 MT in 2020-21.
Wheat output in the last crop year (July-June), had declined by around 3% on year to 106.8 MT because of heat waves during the flowering stage of the crop in March.
Due to lower production and higher global demand, FCI’s procurement in the 2022-23 marketing season fell by more than 56.6% to only 18.8 MT against 43.3 MT purchased from the farmers in the previous year.