The Indian government has indicated that it is ready with the open market sale scheme (OMSS) policy for the next fiscal in an apparent move to keep private traders off the wheat market and allow official procurement to meet the target of 37.3 million tonnes (mt). Wheat is likely to be sold at a minimum ₹2,275/quintal (same as the minimum support price) across the country through e-auction throughout the year

Earlier this month, the Food Ministry conveyed its approval to the Food Corporation of India (FCI) on the policy for the sale of food grains (wheat and rice) stocks in excess of buffer stock norms under OMSS. However, the policy will be valid till July 31 with effect from April 1 in the next financial year. A review will be done in July based on the actual wheat procurement and the price will be fixed for remaining period of the next fiscal, Food Ministry sources said.

According to the policy, sale to private parties in open market through e-auction of wheat will be made at a pan-India reserve price of ₹2,275/quintal for under relaxed specification (URS) variety and ₹2,300/quintal for fair and average quality (FAQ) type of all crop years.

Clear message to millers

The ministry has stipulated that no sale will be undertaken during the procurement period (tentatively until June 30) in wheat-procuring States such as Punjab, Haryana, Uttar Pradesh, Rajasthan and Madhya Pradesh. The ministry will also take a call when to start the e-auction and the quantity to be sold in each round, depending on the market rates of wheat, sources said.

“This is a clear message to flour millers of the southern region not to buy wheat in this procurement season and get it from FCI at subsidised rate and save at least the transport and handling charges from Madhya Pradesh to their factory gate,” said a leading flour miller of a northern State.

The Food Ministry has reportedly come up with an aggressive plan to achieve the wheat procurement target this year as the Centre’s buffer stock, maintained by the Food Corporation of India (FCI), will likely drop below the mandatory norm of 7.66 mt as of April 1. This will be for the first time in 16 years that wheat stocks, which are currently at a 7-year low, will be below the buffer norms.

Uttar Pradesh, the largest producer of wheat, after fixing a target of procuring record 6 mt, has asked some 40 big traders, stockists and flour millers to stay away from market till the government procurement target is achieved. A district magistrate in UP even went a step ahead and sent a letter to Railways not to accept indent from private sector for allocating rakes for the transport of wheat out of the State.

Fiat for sale to co-ops

Under OMSS, the Food Ministry has fixed the pan-India reserve price of rice at ₹3,100/quintal until July 31. The north-east States, hilly States and those facing law and order situation and natural calamities will continue to sell at existing rate of ₹3,400/quintal (including fortified rice). The government has barred private parties in surplus-producing States from buying rice from FCI when paddy procurement continues.

Under the retail sale scheme, designed to check inflationary trends in food economy, the Food Ministry will allocate to semi-government and cooperative organisations such as NAFED, NCCF and Kendriya Bhandar wheat at ₹23/kg till July 31 and rice at ₹24/kg till June 30. The sale will be done only if these organisations agree to sell the atta (flour derived from the wheat) and rice at the maximum retail price (MRP) fixed by the government. Currently, the MRP of atta is fixed at ₹27.50/kg and rice at ₹29/kg.