Out of the 15.25 lakh tonnes (lt) of wheat offered for sale in open market from the official stocks, Food Corporation of India (FCI) sold 3.85 lt, which is 25 per cent of the offer during the second round of e-auction held on February 15.

Weighted average price in the second round was ₹2,338.01/quintal, Food Ministry said in a statement Thursday. The average realised price was ₹2,474/quintal in the first round.

The government last week cut the reserve price of wheat by announcing ₹23/kg Under Relaxed Specifications (URS) category and ₹23.50/kg fair average quality (FAQ) quality, uniform all across the country. Earlier, freight cost from either Bhopal or Ludhiana till the depot was getting added in the reserve prices.

The offtake has come down as it was 42 per cent in the first round whereas it is 25 per cent in the second round, which is attributed by traders to early arrivals of fresh harvest. As many as 1,060 traders/millers had participated in the auction in the second round whereas over 1,150 bidders had participated in the first round.

“The government was expecting at least ₹2/kg reduction as announced in the sale price for cooperatives. However, as the weighted average has fallen by ₹1.36/kg in the current auction compared to first round, some further action can help the government to reduce the prices more,” said a former Chairman of FCI. There are speculations that the government may cut the reserve prices by ₹2/kg in the next round of e-auction.

Food Secretary Sanjeev Chopra had earlier said that with the policy decision “the government will take and is taking”, wheat prices would further come down in next few weeks.

The Food Ministry had last week cut the rate of wheat to ₹21.50/kg from ₹23.50/kg for sale to NCCF/NAFED/ Kendriya Bhandar/States as well as community kitchen/charitable/NGO engaged in relief operations/running relief camps for migrant labourers/vulnerable groups. This subsidised rate is applicable with the stipulation that entire wheat to be processed as atta and to be sold at an MRP of ₹27.50/kg. The earlier price cap on atta was maximum ₹29.50/kg. The economic cost is over ₹25/kg.

In the second round of e-auction, 100-499 tonnes had maximum demand followed by 500-1000 tonnes and 50-100 tonnes, indicating that small and medium flour millers and traders actively participated in the auction, the ministry said. Only 5 bids were received for the maximum quantity of 3,000 tonnes at one go.

To address the rising price of wheat and atta, the government has decided that FCI selling wheat through e-auction throughout the country on every Wednesday till second week of March.

Apart from 25 lt reserved for e-auction, the government has offered 5 lt to states, cooperatives and small traders to lift wheat at reserve prices without participating in e-auction. National Cooperative Consumers’ Federation of India Limited (NCCF) has been allowed to lift 68,000 tonnes, NAFED 1 lt and Kendriya Bhandar and 1.32 lt.