Lukewarm response to govt’s wheat sale
By Sandip Das
The government’s move to offload wheat in the open market continues to receive a lukewarm response this season from bulk buyers such as flour millers, due to adequate private stocks and stable market prices.
The Food Corporation of India (FCI) has so far sold only about 0.67 million tonne (MT) against an allocation of 3 MT for FY26, and the weekly e-auctions are likely to continue until mid-March.
Sources told FE that the corporation may sell around 0.9 MT of wheat in the current fiscal from its surplus stocks. In FY25, the FCI had sold 3 MT of wheat in the open market.
Market Saturation
In the weekly e-auction on Wednesday, only 61,000 tonne of wheat were sold to bulk buyers such as flour millers against an offer of 140,000 tonne. The average price realised was ₹2,704 per quintal, compared with the minimum support price (MSP) of ₹2,585 per quintal for the 2026–27 marketing season (April–June).
The food ministry recently stated that wheat stocks with private entities currently stand at 7.5 MT, nearly 3.2 MT higher than the corresponding period last year.
The FCI has projected a wheat stock of 18.2 MT as of April 1, the start of the 2026–27 procurement season, against a buffer requirement of 7.6 MT.
Govt to offload a record 10.5 MT of rice
The government is aiming to sell a record 10.5 MT of rice in the current fiscal through open market sales, liberal allocations to states, supplies for ethanol manufacturing, and the Bharat rice initiative.
In FY26 so far, the FCI has offloaded 9.39 MT of rice through open market sales (1.39 MT), liberal allocations to states (3.42 MT), ethanol manufacturing (4.49 MT), and the Bharat rice initiative (0.06 MT).
Despite these record sales, central pool rice stocks continue to rise. Current stocks exceed 34 MT, against a buffer requirement of 13.58 MT for April 1. However, the present stock with FCI also includes over 40 MT of grain yet to be received from millers.
In FY25, the FCI had allocated 4.63 MT of rice to the state’s social welfare scheme (1.12 MT), open market sale scheme (1.96 MT) and ethanol manufacturing (2.3 MT). In FY24 and FY23, FCI had sold only 1.54 MT and 1.78 MT of rice respectively offloaded through various schemes to bulk buyers.
Sources said that if rice stocks are not brought down to a comfortable level, the carrying cost of grain will steadily rise and may lead to a spike in food subsidy expenses. The government hiked food subsidy allocation by Rs 25,000 crore to Rs 2.28 lakh crore from the budget estimate of Rs 2.03 lakh crore for FY26.For the last many years, annually the FCI supplies around 36-38 MT of rice and 18-20 MT of wheat under the free ration scheme or Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) to around 810 million people. The procurement under the MSP from the farmers has been in the range of 75 to 80 MT in the last many years leading to piling up of stocks.
This article has been republished from The Financial Express.