Open market wheat sale suspended in April

The government is not releasing wheat for open market sale in April due to ample availability of the food grain in spot markets, a government official said on Friday. The open market wheat sale price for the April-June quarter is yet to be decided, the official said.

The government had released over nine million tonne wheat for open market sale in the year ended March, up 277 per cent from a year ago to check prices.

However, the government has not released any quota for open market sale so far this year, neither has it taken a decision on prices.

The open market sale price is usually declared on a quarterly basis. The government last declared prices of wheat under open market sale scheme in January, ranging from Rs 825 per 100 kg in Punjab to Rs 952 in Kerala.

Open market sale prices differ across states depending on transportation costs incurred.

The official said a high level committee will decide on the open market sale price for wheat for May and June.

The government's decision on open market sale price is crucial as it would indicate government's actual stock position and determine the price cycle for wheat in the coming months, a Bangalore-based industry official said.

He said the government's decision to suspend open market wheat sale in April seems largely a measure to conserve stocks.

As on April 1, the government had 2.1 million tonne of wheat as against the buffer norm of 4 million. Procurement so far has been weak at 6.2 million tonne as on April 19, down 24.4 percent on year.

The government usually sells wheat at predetermined prices under the open market sale scheme, introduced in 1993, to enhance supply during the lean periods and keep prices under control.

In the January-March quarter, however, the government had released additional 6,98,000 tonne of wheat to curb prices, which had breached the Rs 1,000 per 100 kg level on tight supplies.