Govt offloads 3 MT of wheat in market in FY25
By Sandip Das
The government’s market intervention by selling surplus wheat stocks in the open market for the current fiscal year has come to an end with the Food Corporation of India (FCI) offloading 3 million tonne (MT) of the grain. This is against a record 10 MT of grain sold to bulk purchasers in FY24 under open market sale scheme (OMSS) .
In the last weekly auction for selling grains to bulk buyers and processors held on Wednesday, FCI sold 0.49 MT of wheat aimed at improving supplies of grains during the ‘lean’ period. Trade sources told FE that in the last weekly auction, wheat were sold atleast Rs 200/quintal less than previous week’s auction price at Rs 2600/quintal.
Sources said that the weekly e-auction is unlikely to continue as procurement operations for the new marketing season (2025-26) would commence in March 15 in Madhya Pradesh although officially FCI and state agencies would start purchase of wheat from farmers at minimum support price (MSP) from April 1 in the states including Punjab, Haryana, Rajasthan and Uttar Pradesh
Trade sources said fresh harvests have started to arrive in mandis in parts of Gujarat, Maharashtra and Madhya Pradesh, which would boosts supplies.
At present, FCI has 13.55 MT of wheat stock against the buffer of 7.46 MT for April 1. According to industry estimates, the wheat stock is likely to be in the range of 10 – 11 MT on April 1 which would be just above the buffer.
Traders said that Mandi prices are likely to rule around Rs 2600/quintal once crop arrivals pick up in the next couple of weeks as Madhya Pradesh and Rajasthan have announced a bonus of Rs 125/quintal over the MSP of Rs 2425/quintal announced by the centre for 2024-25 season.
Last week, the food ministry had estimated wheat procurement by agencies at 31 MT for the rabi marketing season (April-June) for 2025-26 , which is 26% higher than actual purchase of 26.6 MT in the 2024-25 marketing season.
After achieving a record procurement 43.3 MT in 2021-22 season, the purchase by the government agencies under the MSP operations fell to record low of 18.8 MT in 2022-23 season because of lower output. However, it rose by around 40% to 26.2 MT in 2023-24 season.
Punjab, Haryana, Madhya Pradesh, Rajasthan and Uttar Pradesh contribute significantly to the centre’s wheat procurement under the MSP by agencies including FCI and state corporations
In November, 2024 the government had announced the sale of 2.5 MT of FCI wheat till March 2025 to bulk domestic consumers to check the ‘inflationary trend in the food economy’.
According to the agriculture ministry, wheat output in the 2023-24 crop year (July-June) is estimated at 113.29 MT. However, according to processing industry estimates, the wheat production in the current crop year (2024-25) is projected at 110 MT against 105-106 MT in the previous year.
In the current fiscal, FCI had offered wheat at a price excluding transportation at a base price of Rs 2,325/quintal, against the current year’s MSP of Rs 2,275/quintal for the current marketing year (2024-25).
This article has been republished from The Financial Express