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The Centre’s move to sell wheat and rice in bulk to industrial users and small retailers has brought down their wholesale and retail prices and contributed to its efforts to control inflation.
A study of the price trend showed that prices of the foodgrains have dropped by 2-3 per cent this month.
While wholesale and retail price of rice decreased by 2.17 per cent and 1.78 per cent, respectively, to ₹3,030 and ₹3,528 a quintal since July, that of wheat decreased by 2.82 per cent and 2.18 per cent, respectively, to ₹2,352 and ₹2,652 a quintal during the same period, a statement issued by the Ministry of Consumer Affairs, Food and Public Distribution said on Friday.
Retail inflation
Retail inflation was 5.59 per cent higher in July compared with the same month a year ago but it was lower than 6.26 per cent in June. On Tuesday, the Reserve Bank of India said inflation would stabilise in the coming months as it had peaked during May-June.
The Centre has been able to control rising prices of wheat and rice through its open market sale scheme (OMSS), which checks bulk or wholesale sellers in non-producing centres from raising prices sharply during non-arrival season between June and September. On the other hand, the OMSS is helping bulk users such as millers or retail outlets such as Kendriya Bhandars to buy the grains at competitive prices from the Food Corporation of India (FCI), whose regional offices sell rice and wheat to these buyers.
Reducing inventory
The open market sale scheme also helps FCI cut down its inventory, at least the previous years’ stocks it carries in its warehouses.
Under the OMSS scheme, FCI sells wheat and rice at ₹1,800 for the 2019-20 crop and ₹2,000 for the 2020-21 crop with no quality specification. For fair average quality (FAQ) wheat of all years except this year, the OMSS price is ₹2,100 quintal. Price for this year’s FAQ wheat is ₹2,150.
Similarly, rice is offered at ₹2,000 a quintal for State and Central’s schemes besides to private entities to produce ethanol. For other private parties, rice is offered at ₹2,200 a quintal.
In addition, the Centre has begun selling wheat and rice at ₹21 and ₹22 a kg, respectively, to retail trade, including small retailers who can buy one to nine tonnes at a time. All these will continue till the end of the current fiscal.
An official statement said the Department of Food and Public Distribution is proactively pursuing polices that keep inflation low. It said under OMSS, the Centre has sold 9.84 lakh tonnes of wheat and 4.13 lakh tonnes of rice till July.
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