To lower prices, the government wants to sell 10 MT of grain by the end of the next month, with wheat sales at a record 8.48 MT
With a peak sale of 0.48 MT in the weekly e-auction for bulk purchasers, the government’s open market sale scheme (OMSS) of wheat from the Food Corporation of India (FCI) storage on Wednesday exceeded a record 8.48 million tonne (MT).
Since the e-auction for the bulk purchasers started in June, the government is hoping to sell a record 10 MT of wheat by March 15 of this fiscal year in order to control price spikes.
8.1 MT of wheat were sold in the largest amount to bulk customers, such as flour millers, in 2018–19.
Based on an estimate, the government stock is expected to drop to between 7.7 and 7.8 MT by April 1st, versus a buffer of 7.4 MT, after 10 MT of wheat was offloaded on the market.
The company had only been selling excess wheat to flour millers during the lean season (January–March), in accordance with a previous strategy.
In Wednesday’s auction, the wheat was sold for an average price of Rs 2236 per quintal, which was more than the reserve prices of Rs 2129 per quintal under the open market sale.
The price realized is somewhat higher than the minimum support price (MSP) of Rs 2125/quintal for the current season.
The year-over-year inflation rate for cereals decreased to 7.83% in December 2023 from 9.93% due to a slight decline in wheat prices.
Wheat inflation decreased even further in January, from 4.69% in December of last year to 2.33% in January as a result of improved supply brought about by the FCI’s open market sales.
The procurement of wheat for the April–June 2024–25 selling season would start on April 1.
According to the food ministry, 0.27 MT of flour had been sold as part of the Bharat Atta program.
FCI has given 0.4 MT of wheat to Kendriya Bhandar, National Cooperative Consumers Federation (NCCF), and Farmers’ Cooperatives Nafed for the purpose of turning it into “Bharat Atta,” which is being sold to consumers at Rs 27.5/Kg.
A food ministry report states that on Wednesday, retail wheat prices fell slightly year over year to Rs 31.09/kg. On Wednesday, however, the retail price of rice increased by 13.59% to Rs 43.96/kg.
“The open market sale of wheat has contributed to price stabilization,” FCI chairman and managing director Ashok Kumar Meena had said.
The Bharat rice program was recently introduced by the government, offering rice at a discounted price of Rs 29 per kilogramme.
According to the government, despite record production, adequate inventories with FCI in the pipeline, and numerous taxes and bans on grain exports, domestic rice prices remain at high levels. Under OMSS, FCI has only sold 0.17 MT of rice on the market so far.
