To liquidate surplus stocks and improve supply in the open market, the government has decided to sell FCI wheat to bulk consumers from June in Punjab and Haryana, while from July in other wheat growing states.
From April 1, the state-run Food Corporation of India (FCI) started offloading wheat under the open market sale scheme (OMSS) to non-wheat producing states at a reserve price of Rs 1,550 per quintal plus freight charges.
"In view of poor response from non-wheat growing states and to liquidate surplus stocks, we are extending the sale of wheat under OMSS to wheat-growing states," a senior Food Ministry official told PTI.
The official said that FCI has so far been able to sell only 400 tonnes wheat in non-wheat growing states.
In a fresh directive to FCI, the Food Ministry said, "Besides continuing sale of wheat in non-wheat producing states, FCI will take action to liquidate surplus stock of wheat from its depots located in Punjab and Haryana during the period of June 2015 to March 2016."
FCI will sell wheat in other wheat producing states like Madhya Pradesh from July and will continue till March 2016. Wheat will be sold to bulk consumers in wheat-producing states at Rs 1,550 per quintal, it said.
For sale of wheat to buyers in Jammu and Kashmir, the official said that FCI has been directed to make a special arrangement till the facilities for inducting sufficient quantity of wheat for sale in the hilly state improves.
The FCI has also been authorized to decide about the frequency of the auction of wheat under OMSS in various states depending on the demand.
"However in major wheat surplus states -- Punjab, Haryana and Madhya Pradesh, FCI will ensure conduct of weekly e-auctions for sale of wheat," the official added.
As on May 1, FCI had stock of 34.1 million tonnes of wheat, while the buffer requirement was only 21 million tonnes as on April 1.
The stocks are rising in view of ongoing procurement of wheat from 2014-15 crop at the support price.
In the 2014-15 fiscal, the FCI sold around 4.5 million tonnes of wheat, against the target of 10 million tonnes. While in the previous year, it had sold 6.1 million tonnes.
Wheat production in India, the world's second biggest producer, is expected to decline marginally in the current 2014-15 crop year (July-June) to 90.78 million tonnes from the previous record of 95.85 million tonnes achieved in 2013-14.
