A committee of ministers headed by Home Minister Amit Shah has approved the release of 30 lakh tonnes (lt) of wheat from the stocks held by the Food Corporation of India (FCI) to control prices in the open market. The process of e-auction of stocks will commence immediately by FCI across the country until March 2023, an official statement said.
“The FCI will offload 30 lt of wheat from the Central Pool stock in the market through various routes under the Open Market Sale Scheme (Domestic),” the Food Ministry said on Wednesday. Offloading of wheat through multiple channels will have wider reach as well as an immediate impact on the soaring wheat and atta (wheat flour) prices, it said adding “it will help contain rising prices and bring much relief to the common man.”
Bids, offers and riders
Wheat will be offered to the flour millers, bulk buyers and others through e-auction for a maximum quantity of 3,000 tonnes per buyer, per auction, from an FCI Region. Wheat will also be offered to States for their schemes without e-auction, the Ministry said.. Besides, PSUs and cooperatives like Kendriya Bhandar, NCCF and NAFED will be offered at concessional rates of Rs 2,350/quintal without e-auction, the Ministry said.
“The sale under this special scheme will be subject to the stipulation that the buyer will convert wheat to atta and offer it to public at the maximum retail price of Rs. 29.50 per kg,” the Ministry said.
According to Consumer Affairs Ministry data, there was an over 14 per cent jump in retail prices of wheat and over 18 per cent surge in atta rates in the 2022 calendar year. The current pan-India average retail prices are Rs 29-41/kg for wheat and Rs 34-46/kg for atta in different zones.
The government had 171.7 lt of wheat in its reserves as of January 1, 2023. After the decision to release 30 lt under OMSS and likely offtake of 45 lt under the National Food Security Act (NFSA), the stock at the opening of the next fiscal may be about 97 lt against the buffer norm of 75 lt.
Under the OMSS policy, the government allows the state-run Food Corporation of India (FCI) to sell foodgrains, especially wheat and rice, at pre-determined prices in the open market from time to time to bulk consumers and private traders.
Prices of wheat in some producing States have already topped Rs 3,200/quintal due to the low availability of the grain. Flour millers, who mostly process wheat to produce sooji and maida, had requested the government to release at least 20 lt from the Central Pool stock.
In February 2022, the Centre announced the OMSS wheat policy under which reserve prices were fixed – Rs 2,200/quintal up to September 30 and Rs 2,225/quintal during October-December. However, after wheat procurement dipped to a 15-year low of 187.9 lt in 2022-23 rabi marketing season (April-March), the government suspended the scheme in April.
The Centre banned wheat exports on May 13, 2022, to control prices after a slight fall in domestic production and the sharp decline in procurement. But it has allowed export on humanitarian grounds and for diplomatic reasons to friendly countries on government to government requests.