The Food Corporation of India (FCI) sold about 4.91 lakh tonnes (lt) of wheat, or 46 per cent of the 10.69 lt offered, in the sixth round of e-auctions on Wednesday.

Of the 45 lt earmarked under the open market sale scheme (OMSS), nearly 34 lt has been sold in a span of 45 days, indicating a shortage of the grain, which caused the price spiral.

In the sixth round of e-auction, in which 970 bidders participated, the weighted average selling price was ₹2,214.32/quintal, which is ₹16 higher than the ₹2,197.91 of the previous round. The average selling rate was ₹2,193.82 in the fourth round, ₹2,172.08 in the third round, ₹2,338.01 in the second round and ₹2,474 in the first round.

In Gujarat, where the fresh wheat crop started arriving in the last week of February, FCI sold only a quarter of the 35,000 tonnes allotted in the sixth round and the average price realisation was ₹2,149/quintal, sources said. The lukewarm response is seen as an indication that the current wheat crop in the State is in good condition.

OMSS to continue?

Lots of 100-499 tonnes had maximum demand in the sixth round, followed by lots of 500-999 tonnes and then 50-100 tonnes. Some bids were received for the maximum quantity of 3,000 tonnes, the Food Ministry said.

Though there has been a drop in wholesale/ mill-gate prices, the high rates in retail have been a concern and the sustained rise in selling rates in the last three rounds of OMSS may force the government to continue the bulk sales programme for the remaining 10-11 lt in the consuming states, even after procurement starts from April, sources said.

The Government earlier expected the fall in selling prices in the initial few rounds of the auction, to also reflect in the retail market. Official sources said 23.30 lt of wheat sold through OMSS had already been lifted by traders/ processors as on March 14.

100% offtake in TN, Telangana

The retail inflation rate for the food basket worked out to 5.95 per cent last month, marginally lower than 6 per cent in January. It was 5.85 per cent in February last year. According to the data, retail prices recorded a double-digit increase in spices (20.20 per cent) and cereals (16.73 per cent) , while edible oil and vegetable prices declined.

Tamil Nadu and Telangana recorded 100 per cent offtake in the last two rounds, while in Karnataka it was 100 per cent in the fifth round and over 96 per cent in the sixth round. In Andhra Pradesh and Kerala, offtake was over 70 per cent, sources said.

“The offtake in most of the southern States is good as the reserve price of ₹2,150/ quintal (same across the country) is lucrative; millers have to add ₹300-400 extra if they purchase from Madhya Pradesh or Uttar Pradesh,” said a flour miller in Karnataka. 

Though the average selling price of OMSS wheat in Tamil Nadu is higher than the reserve price by ₹250-260 (in the last two auctions), it is still cheaper, he said. 

In the sixth round, the average selling price dropped to ₹2,320 from ₹2,412 in the fifth round.