The Indian government, through the Food Corporation of India (FCI), has sold 2.88 lakh tonnes (lt) of wheat in the open market through an auction on November 1, which is nearly 96 per cent of the 3 lt of the total quantity offered for sales to the processors. With higher allocation for the auction, the government has been able to contain the rising trend in wheat prices, an official said.

The weighted average selling price of wheat was ₹2,310/quintal on November 1 e-auction, which is the same as the previous week, the official said.

The weighted average selling price was ₹2,291.15 for fair average quality (FAQ) variety wheat against its reserve price of ₹2,150 and ₹2,311.62 in the case of under relaxed specifications (URS) variety against the reserve price of ₹2,125. “The government has decided that the sale for wheat under the open market sale scheme (OMSS) will continue till March 31, 2024, and 101.5 lt will be offloaded by then to keep the prices in check,” the Food Ministry said in a statement Thursday. It is not immediately clear if an additional 101 lt will be offered over and above 30 lt already sold in the 19 rounds of weekly e-auction since June 28.

Also read: Govt allows processors to buy double quantity wheat, total allocation raised 50%

“It is a challenge to contain wheat price, particularly after the declaration of the new minimum support price (MSP) which will be applicable for the next crop as the market has already got the signal,” said a flour miller adding the more quantity being offered for sales, the more its impact would be on the market.

The government has increased the wheat MSP for next rabi marketing season (April-March) to ₹2,275 from ₹2,125.

Measures

The government has taken a number of steps to keep wheat prices under check. While traders have been kept out of the auction by allowing only processors to take part, last week it raised the per bidder quantitative cap to 200 tonnes from 100 tonnes in each round so that higher availability is ensured.

However, as the number of bidders has more than doubled to over 2,000 from about 1,000 initially, the government has also been conducting random checks on the successful bidders and so far 1,721 inspections have been made across the country to avoid hoarding of stocks, the ministry said.

From last week, the government has also introduced verification of the last three months of electricity bills of the processing plants/units before issuing the release order to the successful bidders.

Related Topics