The Food Corporation of India (FCI) sold 2.84 lakh tonnes (lt) of wheat in the open market through auction on Wednesday, taking the total to nearly 42 lt so far, since weekly sales of the grain from the government reserves began on June 28 under the open market sale scheme (OMSS) to control domestic prices.

The weighted average selling price of wheat was ₹2,128/quintal on November 29 e-auction, which almost same as was in the previous week, official sources said. But, the weighted average selling price was ₹2,279/quintal.

Record participation

There was a record participation of 2,420 bidders in the last wheat auction despite traders being kept out of the process and stringent checking happening to ensure only processors get the wheat so that atta (flour), maida and sooji prices will remain under control, an official source said.

The average selling price on November 15 auction dropped to ₹2,233.61/quintal from ₹2,251.79 in its previous week. But, the rates have started moving up in past two rounds of auction.

The government has increased the minimum support price (MSP) of wheat for next rabi marketing season (April-March) to ₹2,275/quintal from ₹2,125 in the 2023-24 season.

The Food Ministry has announced that wheat sales under the open market sale scheme (OMSS) will continue till March 31, 2024, and 101.5 lt will be offloaded to keep the prices in check. So far, 23 rounds of auction have been completed in which 41.81 lt of wheat have been sold, officials said, adding there may be another 17 rounds by March 31.

Govt steps to cool prices

“As seen by the interest of bidders in past few weeks, there could be another 48-50 lt of wheat FCI can sell maximum by March 31, taking the total to about 90 lt this year,” a flour miller said.

The government has taken a number of steps to keep wheat prices under check. While traders have been kept out of the auction by allowing only processors to take part, the per bidder quantitative cap has been hiked to 200 tonnes from 100 tonnes in each round from November 1 so as to ensure higher availability in the market.

The government has also introduced verification of last three months of electricity bills of the processing plant/unit before issuing the release order to the successful bidders. This is primarily done to keep traders out of the auction, directly or indirectly, officials said.

Besides, 2.28 lt of wheat has been allocated at concessional rates to cooperative organisations Kendriya Bhandar, NCCF and NAFED for converting the grain to atta and sell to the public under ‘Bharat Atta’ brand at a maximum retail price of ₹27.50/kg. Of the 78,450 tonnes of indent placed by these agencies, the lifting was only 44,246 tonnes as of November 28.