The Food Corporation of India (FCI) has signed an agreement with the National Spot Exchange (NSEL) for sale of wheat under the Open Market Sale Scheme.
The agreement was signed on October 11 and is valid up to March 31, 2011, a release said today.
The scheme (OMSS) is launched by FCI for sale of wheat from its buffer stock to the bulk consumers—roller flour mills. This is a kind of market intervention scheme followed by FCI with a view to check wheat prices, which may go up during lean season.
During the October-March period, prices of wheat usually go up due to lower availability of stock in physical market.
NSEL has been able to deliver a unique pan-India electronic auction platform for large Government companies, like FCI, to sell various commodities. Since the prices displayed on NSEL electronic platform are visible across the country, such prices influence the physical market sentiments immediately.
On the other hand, buyers feel comfortable to buy wheat through NSEL platform, because of operational ease, lower cost of transaction and greater efficiency.
FCI is already a member of NSEL and is well-versed with its trading platform. Large numbers of roller flour mills are already connected with the NSEL trading platform. Physical market prices will also be higher compared to FCI floor price.
