FCI sells 385,000 tonnes wheat in open market via e-auction, control prices

Food Corporation of India (FCI) sold 3.85 lakh tonnes of wheat to bulk consumers in the second round of e-auction, as part of its efforts to boost domestic supplies and control prices of wheat and atta (wheat flour).

Last month, the government announced plans to sell 30 lakh tonnes of wheat in the open market from its buffer stock under the Open Market Sale Scheme (OMSS).

Out of the 30 lakh tonnes, the Food Corporation of India will sell 25 lakh (2.5 million) tonnes to bulk consumers like flour millers through e-auction and 2 lakh tonnes will be given to states/union territories. As much as 3 lakh tonnes of wheat are being provided to institutions and state PSUs at a concession for converting wheat into wheat flour.

"More than 1,060 bidders participated and 3.85 LT (lakh tonnes) wheat was sold during the second e-auction organised by the Food Corporation of India (FCI) on February 15," an official statement said.

FCI, the government's nodal agency for procurement and distribution of foodgrains, had offered 15.25 lakh tonnes of wheat stock during the auction.

In the second e-auction, quantities ranging from 100 to 499 tonnes had maximum demand followed by 500-1,000 tonnes and 50-100 tonnes. This indicates that small and medium flour millers and traders actively participated in the auction.

"Only 5 bids were received for the maximum quantity of 3,000 tonnes at one go," the statement said.

The weighted average rate of Rs 2,338.01 per quintal was realised by FCI in the auction. "Rs 901 crore was generated by FCI in the 2nd e-auction," the statement said.

In the first round of e-auction, FCI had sold 9.2 lakh tonnes of wheat.

In order to address the rising price of wheat and atta in the country, FCI is offering wheat for e-auction. The sale of wheat through e-auction will continue throughout the country every Wednesday till the second week of March 2023.

According to the statement, the Centre has allocated 3 lakh tonnes to government PSUs, cooperatives/federations like Kendriya Bhandars, NCCF and NAFED for sale without e-auction. The concessional rates for wheat to be lifted have been recently reduced to Rs 21.50/kg and the sale of atta from such stock at price not exceeding Rs 27.50 per kg.

Out of these 3 lakh tonnes, the National Cooperative Consumers' Federation of India Ltd (NCCF) has been allowed to lift 68,000 tonnes of wheat stock. Allotment of 1 lakh tonne wheat is made to NAFED and 1.32 lakh tonnes to Kendriya Bhandars.

On Wednesday, Union Food Secretary Sanjeev Chopra had said the prices of wheat in wholesale and retail markets have come down by about Rs 5 per kg after the Centre decided to sell 30 lakh tonnes of the grain in the open market and asserted that more steps will be taken if required to ease rates.

The government is closely monitoring the prices of wheat and atta (wheat flour) and, if needed, will take more steps, including offering more wheat under the OMSS, to bring down the prices and provide relief to consumers, Chopra had said.

"From the time the OMSS was announced in January, wheat prices have come down. Wheat prices in wholesale markets are ruling less than Rs 2,500 per quintal," he had said, and hoped that the prices would fall further in the coming days.

"The government of India is very concerned and monitoring the situation very closely. Whatever further steps need to be taken in terms of bringing down the prices we will take," Chopra had said.

The options include increasing the quantities under the OMSS from the current 3 million tonnes and also reducing the reserve price.

The food secretary mentioned that the 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 3,300-3,400 per quintal.

The Centre 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 year (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.

On Tuesday, the Agriculture Ministry predicted that wheat production may rise to record 112.18 million tonnes in the current 2022-23 crop year. The procurement of wheat will start in full swing in April.

The FCI 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.