FCI wheat sales to cross record 10 MT in FY24
By Sandip Das
he government’s open market sale of wheat from the Food Corporation of India (FCI) stocks is likely to cross a record 10 million tonne (MT) in the current fiscal year, due to the aggressive offloading of grain aimed at curbing the spike in prices.
So far, the FCI has sold 7.1 MT of wheat since the weekly electronic-auction of grain was launched in June. On Wednesday, 0.42 MT of grin was sold to bulk buyers.
Sources told FE that an additional 3 MT of wheat is likely to be sold in the market as the government has decided to sell 0.5 MT of wheat every week from January 31 till middle of March. The highest quantity of wheat sold under open market sale scheme (OMSS) was 8.1 MT in 2018-19. The corporation had sold 3.3 MT of wheat under OMSS in 2022-23.
Wheat stock with FCI on Wednesday was 14.35 MT, lowest since 2016 against the buffer of 13.8 MT for January 1. Following the offloading of 10 MT of wheat in the market, the government stock is likely to fall to a buffer of 7.4 MT by April 1.
As per earlier policy, the corporation had been selling surplus wheat to bulk buyers like flour millers only during the lean season (January-March). Procurement of wheat for the 2024-25 marketing season (April-June) would commence from April 1.
The wheat was sold in Wednesday’s auction at an average price of Rs 2250/quintal against the reserve prices of Rs 2128/quintal, under the OMSS. The price realised is just above the current season’s minimum support price (MSP) of Rs 2125/quintal. Inflation in wheat declined further to 4.69% in December from 6.36% in November on year because of improvement in supplies due to open market sale being carried out by the FCI.
According to a food ministry note, retail prices of wheat declined marginally by 1.27% to Rs 31.03/kg on Wednesday on year. However, retail prices of rice rose by 14.93% to Rs 43.96/kg on Wednesday.
The open market sale of wheat has helped in stabilising prices,” Ashok Kumar Meena, chairman and managing director, FCI had stated recently. Under Bharat Atta initiative, FCI has allocated 0.4 MT of wheat to Kendriya Bhandar, farmers’ cooperatives Nafed and National Cooperative Consumers Federation (NCCF) for converting into ‘Bharat Atta’ which is being sold to consumers at Rs 27.5/Kg.
Meanwhile, the food ministry is considering proposals to sell rice at subsidised prices through retail outlets under the Bharat rice initiative. The ministry said that the domestic prices of rice are at elevated levels despite a record output, ample stocks with FCI in the pipeline and various restrictions and duties imposed on grain exports. FCI has sold only 0.16 MT of rice in the market so far under OMSS.
This article has been republished from The Financial Express.