Wheat prices at the weekly open market sale scheme (OMSS) auctions conducted by the Food Corporation of India (FCI) on Wednesday drop to a 2-1/2 month low level after the Government increased the offering in the sale by 33 per cent. The all-India average selling price dropped to ₹2,172.94/quintal - the lowest since September 27 - from ₹2,301.36 in the previous round.
The average selling price was ₹2,172.94/quintal on September 27 as prices started moving up from September 6.
Stock holding norms tightened
According to sources, FCI sold 3.47 lakh tonnes (lt) of wheat out of 4 lt offered in the open market through e-auction on Wednesday, taking the total to nearly 48.12 lt so far, since sales of the grain from the government reserves began from June 28 underOMSS to control domestic prices.
The government last week announced 4 lt would be made available from the official reserves through weekly auction with immediate effect against 3 lt earlier. Besides, stock holding limits for all stakeholders have been further tightened to ensure sufficient availability in the market.
Food Secretary Sanjeev Chopra had said if there was a need, there could be additional release of 25 lt of wheat over and above 101 lt already allocated for the open market sale scheme (OMSS).
The highest bidded price in Maharashtra dropped to ₹2,400 from ₹2,475 in the previous round, in Madhya Pradesh to ₹2,450 from ₹2,490, in Uttar Pradesh to ₹2,370 from ₹2,590 and in West Bengal to ₹2,325l from Rs 2,400.
All India average selling price of wheat in FCI tender on December 6 increased by nearly ₹70/quintal in four weeks even after the weekly offering was hiked to 3 lt from 2 lt. There was a massive jump of ₹225 in the highest bidding price in Karnataka in a month.
In the December 6 auction, the highest price of the successful bidder in Karnataka was ₹2,800 against the highest price of ₹2,575 on November 15, sources said. The all India average selling price of wheat was ₹2,301.36 on December 6, up from ₹2,233.61 on November 15.
On December 13 auction, the highest rate in Karnataka further increased to ₹2,825 and similarly in Rajasthan to ₹2,525 from ₹2,500 on December 6, in Gujarat to ₹2,250 from ₹2,220/ and in Punjab to ₹2,660 from Rs 2,570.
The government has increased the minimum support price (MSP) of wheat for next rabi marketing season (April-March) to ₹2,275/quintal from ₹2,125 in the 2023-24 season. There was speculation of further increase in market rates after the BJP won polls in three States as the party has promised to pay the States’ farmers ₹2,700 for wheat.