The Food Corporation of India (FCI) has awarded over 9 lakh tonnes (lt) or 40 per cent of the 22 lt of wheat offered for sale by the Centre to cool down the prices of the cereal. It has received bids that are higher than reserve prices for all the quantity for which quotes were invited.

“FCI offered 22 lt out of 25 lt wheat earmarked for e-auction from the Central Pool stock in the market through various routes under the Open Market Sale Scheme (domestic) in the first tranche on February 1. More than 1,100 bidders came forward for participation in the first e-auction and a total of 8.88 lt was sold in 22 States,” the Food Ministry said in a statement.

In Rajasthan, the bidding could not take place on February 1 due to a technical glitch in the system and an e-auction was conducted on Thursday in which over 33,000 tonnes were sold, taking the total sales to 9.21 lt, sources said.

Unviable in Rajasthan

Commenting on low offtake in Rajasthan, Navneet Chitlangia, senior Vice-President of Roller Flour Millers’ Federation of India, said the reserve price in Rajasthan is high that it is not economically viable to buy from the State. Industry sources said many traders have bid in Madhya Pradesh to bring the grain to Rajasthan.

Bidding at Bhopal depot, where the reserve price is ₹2,300/quintal for Under Relaxed Specifications (URS), and bringing it to Jaipur by road one will have to pay ₹200/quintal freight, making the mill-gate price around ₹2,500/quintal. In comparison, FCI’s reserve price in Jaipur is ₹2,443 for URS and ₹2,493 for FAQ. “There will be a mandi fee above the reserve price and also the transport costs from depot to mill which makes it higher for the millers,” an industry official said.

Further sales of wheat through e.-auction will continue throughout the country on every Wednesday till the second week of March, the ministry said.

Punjab, UP sales

Out of 2.74 lt offered for sales in Punjab, traders and millers have been awarded 2.56 lt of wheat (or 94 per cent) for which FCI will receive over ₹604 crore at an average realisation of ₹2,358/quintal, industry sources said.

The weighted average winning price in Punjab is ₹2,351/quintal for the URS category against its reserve price of ₹2,300/quintal and ₹2,379/quintal for the fair average quality (FAQ) category against ₹2,350/quintal reserve price. The highest bid price in Punjab was for 1,000 tonnes at ₹2,580/quintal for FAQ variety against the reserve price of ₹2,350/quintal.

“We wanted to bid at ₹2,480 as done in some other lots, but due to some error, it got to ₹2,580 and since we had already deposited a huge sum as earnest money, we did not want to withdraw,” said the owner of Satgur Roller Flour Mill of Kapurthala, Punjab. The second highest bid in the State was for 100 tonnes at ₹2,550 by Jai Shree Balaji Trading Co of Jalandhar. “There was hardly any grain and millers were long awaiting for FCI to start selling wheat,” said Naresh Ghai, a former president of Punjab Roller Flour Millers Association.

In Hardoi, Uttar Pradesh, the top bid was at ₹2,950/quintal and next was at ₹2,933/quintal in Gorakhpur, against the reserve price of ₹2,513/quintal, industry sources said. In Madhya Pradesh, 89 per cent of 1.91 lt (all URS category) on offer got sold on the first day for which FCI would realise ₹399 crore, with the average realisation being ₹2,353/quintal.

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