FCI sells 3 MT wheat since February 1

By Sandip Das

The Food Corporation of India (FCI) on Thursday sold 5,40,000 tonne of wheat to private bulk buyers such as flour millers and food companies through its fifth e-auction in the current season, taking the total grain sold in open market this year to 2.84 MT.

More than 1,000 bidders across 23 states participated in the e-auction and the average price of wheat realised by the FCI has been Rs 2,196/quintal against the Minimum Support Price (MSP) of Rs 2,125/quintal fixed for the next procurement season (2023-24) beginning on April 1.

The corporation is likely to hold the last e-auction next week only in non-procuring wheat states.

Through open market sale, market prices of wheat have declined to close to MSP at present from Rs 3,000/quintal prevailed beginning of the year.

In the last four e-auctions held since the beginning of February, FCI has sold 2.3 MT wheat to bulk buyers.

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.

Sources said that another 0.3- 0.4 MT of wheat is likely to be sold in the last e-auction.

As on Thursday,the FCI has wheat stock of 11 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 around 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.

According to the department of consumer affairs, modal prices of wheat and flour (atta) on Thursday rose to Rs 28/kg and Rs 35/kg from Rs 25/kg and Rs 32/kg respectively prevailing three months back. Food officials said that wheat and atta prices are expected to fall further in the next couple of weeks as it takes about a month from purchase of wheat to processed into atta in the market.

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.

This article has been republished from The Financial Express.