The government has agreed to sell 1.5 million tons of wheat from the central pool to flour millers, independent merchants, large purchasers, and producers of wheat-based goods until March 2024 to monitor prices.
The Food Corporation of India (FCI) received bids for 0.12 million tons of wheat from 1340 bulk customers, including flour millers and food firms, in its second weekly electronic auction this year under the open market sale system (OMSS). However, only five bidders proposed to buy 170 tons of grain in the corporation’s inaugural e-auction, which was for the sale of 0.38 million tons of rice.
The average bid for fair and average grade wheat was Rs. 2,137/quintal, slightly more than the reserve price of Rs. 2130/quintal. The current season’s Minimum Support Price (MSP) for wheat is Rs. 2125/quintal.
The government has agreed to discharge 1.5 million tons of wheat from the central pool to flour millers, private dealers, bulk purchasers, and producers of wheat products under the OMSS until March 2024 in order to check prices. The firm sold just 89,000 tons of wheat in the inaugural weekly e-auction of wheat held last week, versus 0.4 million tons offered. Officials believe that the FCI’s open market sale of rice for years has not piqued the attention of merchants and bulk purchasers due to the cereal’s diverse and bountiful production across the country.
The FCI will continue to sell food grains from its surplus supplies until the inflationary trend in cereal prices is reversed. Current grain supplies are over the buffer and sufficient to conduct open market sales. The FCI has 25.92 million tons of rice, which excludes 15.84 million tons yet to be receivable from millers at the beginning of this month. The corporation needs 36 million tons of rice annually for allocation under the national food security act (NFSA).
The government is discussing several options, including reducing import duty on wheat from the current level of 40% to control domestic prices. Retail wheat prices rose by 12.61% in May, against 15.46% in the previous month, and inflation in rice rose by 11.33% in May.