The govt aims at selling 10 million tonne wheat from FCI stocks in the open market by March 2015. FCI had a wheat stock of 32 million tonne at the start of October, far more than the buffer norms
The government’s move to sell excess wheat stocks through Open Market Sale Scheme (OMSS), which started on a slower note, picked up pace this week.
After the scheme was launched in August, the Food Corporation of India (FCI) could sell only about 7 lakh tonne of wheat to bulk buyers like flour millers through weekly tender till third week of this month.
However in the weekly tender, which was approved on Thursday, more than 1 lakh tonne of wheat was sold through OMSS, thus, increasing the total quantity of grain sold under OMSS close to 8 lakh tonne till now.
FCI officials told FE that the demand from wheat under OMSS is expected to increase in the next few weeks as the stocks held with private traders have declined sharply.
The government aims at selling 10 million tonne wheat from FCI stocks in the open market by March 2015. FCI had a wheat stock of 32 million tonne at the start of October which is far more than the buffer norms.
The FCI conducts weekly auction to sell wheat in the open market. The government has set a reserve price of Rs 1,500 per quintal plus freight cost to the consuming locations.
Besides, the buyers have to pay 5% extra on the base prices for the new wheat crop (2014-15 season) whose procurement by government agencies ended in June.
In 2013-14, FCI had sold 5.8 million tonne wheat to bulk buyers while the government had set a target of 8.5 million tonne of grain to be sold under OMSS. The corporation had realised average price of more than Rs 1,604 per quintal for the wheat sold to private traders from the total sell earning of Rs 9,310 crore.
Under OMSS, around 20 key consuming states such as Uttar Pradesh, Madhya Pradesh, Kerala, Tamil Nadu, Karnataka, Orissa, Bihar, West Bengal and Maharashtra were allocated 2 lakh tonne of wheat for sell to bulk buyers. Himachal Pradesh and north-eastern states have been allotted 50,000 tonne of wheat each.