FCI sells 5 MT of wheat in open market so far

By: | Published: January 23, 2016 1:46 AM

With more than 3 lakh tonne of wheat being disposed of each week since December, the Food Corporation of India (FCI) has sold 5.2 million tonne of grain to bulk buyers under the Open Market Sale Scheme (OMSS) so far.

With more than 3 lakh tonne of wheat being disposed of each week since December, the Food Corporation of India (FCI) has sold 5.2 million tonne of grain to bulk buyers under the Open Market Sale Scheme (OMSS) so far.

Sources told FE that by the end of the current fiscal, the corporation is aiming at uploading more than seven million tonne of wheat to private bulk buyers thus reducing FCI’s excess grain stock considerably.

However, FCI would consider whether to continue with OMSS because of lesser sowing of wheat in the ongoing rabi season which could pull down production as well as volume of procurement. At the start of the current month, FCI had a wheat stock of 23.78 million tonne against the buffer stock norm of 13.8 million tonne, thus leaving out the remaining stocks as excess.

Sources said that notwithstanding about 4% lesser sowing of wheat in this rabi season compared to last year, the weather condition during next few weeks would impact the final output of grain. “In the current year even if our procurement goes down because of lower output, we do not face any problem in providing wheat to the states for PDS, maintaining strategic reserve and selling around 5 million tonne of grain in the market,” an official said.

“However, if the wheat output drops next year, we need to have adequate stock to deal with exigencies,” the official said. The OMSS wheat so far has been sold at an average price of R1,610 per quintal. FCI had sold 5.8 million tonne and 4.5 million tonne of wheat under OMSS in FY14 and FY15, respectively.

According to data released by ministry of agriculture on Friday, the wheat has been sown in more than 29 million hectare, which is around half a million hectare less than the previous year or from the normal sowing. Overall gap in the winter-sown crops in compared to last year have shrunk to less than 3%, data stated.

The FCI conducts a weekly auction to sell wheat in the open market using the platform of commodity bourse NCDEX. The government has set a reserve price of R1,500 per quintal plus freight cost to consuming locations.

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