According to Union Food Secretary Sanjeev Chopra, the prices of wheat in wholesale and retail markets have gone down by about Rs 5 per kg after the Center’s decision to sell 3 million tonnes of the grain in the open market. He emphasized that more steps will be taken if required to ease rates.
According to Chopra, the government is closely monitoring wheat and atta (wheat flour) prices and, if necessary, will take additional steps, such as offering more wheat under the Open Market Sale Scheme (OMSS), to bring down prices and provide relief to consumers.
He said the government is not considering any proposal as of now to lift the ban on wheat exports, which was imposed in May last year after a sharp fall in its procurement.
Chopra explained that since the OMSS was announced in January, wheat prices have come down. Wheat prices in wholesale markets are less than Rs. 2,500 per quintal, and it is expected that the prices will fall further in the coming days.
“The government of India is anxious and watching the situation very closely, and whatever further steps need to be taken in terms of bringing down the prices, we will take,” Chopra said. The options include increasing the quantities under the OMSS from the current 3 million tonnes and also reducing the reserve price.
Alongside, the food secretary said that wholesale prices have fallen to around Rs 2,500 from Rs 3,000 per quintal, while retail prices have eased to Rs. 2,800-2,900 per quintal from Rs. 3,300-3400 per quintal.
Last month, the government announced plans to sell 30 lakh (3 million) tonnes of wheat in the open market from its buffer stock under the OMSS, in order to check rising wheat and wheat flour prices. Out of the 30 lakh tonnes, Food Corporation of India (FCI) will sell 25 lakh (2.5 million) tonnes to bulk consumers like flour millers through an online auction, and another 2 lakh tonnes will be given to states and union territories.
3 lakh tonnes of wheat are being provided to institutions and state PSUs at a concession for converting wheat into wheat flour. Chopra said the second round of wheat auctions for 1.5 million tonnes is happening on Wednesday across the country.
The food secretary added that the government has recently reduced prices to 21.50 per kg from Rs. 23.50 for institutions like NAFED and Kendriya Bhandar for converting wheat into atta and selling it to consumers at Rs 27.50 per kg, as opposed to the earlier rate of Rs. 29.50 per kg.
Under the OMSS, the Center had last week decided to do away with freight charges and sell the grain at a reserve price of Rs 2,350 per quintal to bulk users across India through e-auction. The states are permitted to purchase wheat from FCI at prices higher than the reserve without participating in an e-auction.
During the first e-auction on February 1-2, FCI sold 9.26 lakh metric tonnes of wheat out of a total of 25 lakh metric tonnes to traders, flour mills, and others. The next auction will be held on February 15. FCI, the government’s nodal agency for procurement and distribution of food grains, had around 156.96 lakh tonnes of wheat as of January 26 in the buffer stock.
On April 1, the country would have a wheat stock of 96 lakh tonnes, just above the buffer norm requirement of 75 lakh tonnes. The Center had banned wheat exports in May last year to control prices after a slight fall in domestic production and a sharp decline in the FCI’s procurement for the central pool. India’s wheat production fell to 107.74 million tonnes in the 2021–22 crop years (July–June) from 109.59 million tonnes in the previous year due to heat waves in a few states. The procurement fell sharply to 19 million tonnes this year from around 43 million tonnes last year. The area under coverage for wheat crops in the current Rabi (winter-sown) season is slightly higher. On Tuesday, the Agriculture Ministry predicted that wheat production may rise to a record 112.18 million tonnes in the current 2022–23 crop year. Wheat procurement will begin in earnest in April.