The Food Corporation of India (FCI) on Wednesday sold 5,40,000 tonne of wheat to private bulk buyers such as flour millers and food companies through the fourth e-auction, taking the total grain sold in open market this year to 2.35 MT.
More than 1,000 bidders across 23 states participated in the e-auction and the average price of wheat realised by FCI has been Rs 2,193.82/quintal against the Minimum Support Price (MSP) of Rs 2,125/quintal fixed for the next procurement season (2023-24) beginning on April 1.
Through open market sale, the government is aiming to bring down the mandi prices of wheat to MSP for 2023-24 marketing season (April-June) in the next couple of weeks so that agencies get sufficient volume of grain for procurement.
In the last three auctions held since the beginning of February, FCI has sold 1.8 MT of wheat to bulk buyers.
“The sale has brought significant effect in cooling down the price of wheat and atta all over the country which is likely to remain stabilised with the future tenders for open sale of wheat,” according to a food ministry statement.
The FCI will conduct its last e-auctions of wheat on March 15, 2023.
The government has approved selling 5 MT of wheat to be sold in the open market, which includes 5,40,000 tonne of grain is allocated to the state governments and agencies such as NAFED, Kendriya Bhandar and NCCF for selling flour (atta) at a maximum retail price of Rs 27.50/kg.
At present,the FCI has wheat stock of 13.2 mt while buffer requirement for April 1, 2023 is 7.4 mt. 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.
Inflation in wheat prices rose by a sharp 25.05% on year in January, pushing up retail food inflation to 5.94% from 4.19% reported in the previous month.
Under the open market sale policy, the government allows FCI to sell food grains, especially wheat and rice, at predetermined prices in the open market from time to time to bulk consumers and private traders.
The aim is to boost the supply during the lean season and moderate the prices. The agriculture ministry’s estimate of a record wheat harvest of 112.18 MT for the 2022-23 crop year (July-June) has given a boost to the prospects of the government’s procurement drive for next the marketing season which begins on April 1.