In order to improve offtake, it has decided to approach the food ministry.
The Food Corporation of India (FCI), a key player in ensuring the food security of the nation, is now taking steps to address the problem of plenty. The corporation has a huge wheat stock and in order to improve offtake, it has decided to approach the food ministry for freedom to fix prices for open market sale as well as sale through tenders.
FCI also wants the government to allow it to take spot exchanges membership for all states where the electronic platforms are available to enable it to use online platform more frequently, said the source.
FCI has 17.8 million tonnes of wheat lying in open plinths mostly in Punjab and Haryana and since proper godowns are not available, the stock may rot. The market prices have remained comparatively high despite high production.
FCI tried to sell wheat through online spot exchanges but was not met with noteworthy success. Earlier when it attempted such sale in March, it failed as open market prices were lower than FCI reserve prices. It did sold over 1,000 tonnes in June.
It has online spot exchange membership only for Delhi, as spot exchanges have state-wise licenses. Now FCI is approaching the government to have nation-wide membership of such exchanges. This along with freedom to decide price at which it can sell wheat on the electronic platform will help selling the commodity faster and efficiently, the source said.
Anjani Sinha, CEO, National Spot Exchange said, “The selling process of FCI wheat through spot exchanges is efficient as we guarantee delivery and payment to buyer and seller and settlement process is faster compared to tender sale by FCI directly. For delivery purpose we have made special arrangements for recognising warehouses where FCI wheat has been stored.”
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FCI has also decided to sell 5 million tonnes wheat through tenders. A part of this sale is expected to take place through spot exchanges.
Devendra Vora of Friendship Traders, a Navi Mumbai-based firm said, “At present wheat is in demand and FCI should sell as much wheat from its stockpile as possible. Southern and western millers have opted for imported wheat in absence of wheat availability at affordable price. FCI sale will help them in procuring wheat locally and price sentiment will also be under check.”
He also suggested if proper railway wagon facilities are assured along with open sale then there is enough appetite for wheat in western and southern market of the country.
Pulses sale through spot exchanges is more popular. PEC, MMTC and Nafed sold 20 per cent of imported pulses through the National Spot Exchange, Sinha said.
According to the officials who was present in meeting between FCI, Forward markets Commission (FMC) and others last Saturday at FMC’s head quarter in Mumbai, “It is also decided that the FCI will sign agreements with both the spot exchanges which will be submitted to FMC and in case of disputes, FMC chairman’s decision will be binding on all concerned.”