Government To Offload Additional 20 Lakh Tonnes Of Wheat In Open Market To Cut Prices

The Centre on Tuesday announced sale of an additional 20 lakh tonnes of wheat in the open market to further bring down the retail prices of wheat and wheat flour (atta) and asked flour millers to cut rates with softening in wholesale price of grain.

On January 25, the Centre had announced sale of 30 lakh tonnes of wheat in the open market from its buffer stock to check rise in prices of wheat and wheat flour (atta). 

According to an official statement, the government has decided that state-owned Food Corporation of India (FCI) will offload an additional quantity of 20 lakh tonnes of  wheat in open market under the Open Market Sale Scheme (OMSS). The stocks will be  sold through e-auction to flour mills/private traders/bulk buyers/manufactures of wheat products.

The proposal to sell stocks in the open market was taken by a group of ministers, sources said.

"So far, 50 lakh tonnes (30+20 lakh tonnes) of wheat have been decided to be offloaded under the OMSS. The reduction in reserve price along with additional offloading of 20 lakh tonnes of wheat will collectively help in reducing market price of wheat and wheat products for consumers," the statement said.

Union Food Secretary Sanjeev Chopra held a video conference meeting with Food Corporation of India (FCI) and the representatives of flour millers/associations/ federations/atta, suji product manufacturers on to review the lifting of stocks in the second round of e-auction held recently.

Flour millers were advised to bring down the prices of atta and other products in line with the reduction in market prices of wheat, the statement said.

After announcement of the OMSS policy, the food ministry said that prices of wheat and atta have come down but still inflation figure for January 2023 was at 3 months high of 6.52 per cent.

As per the government data, the average prices of wheat across major cities stood at Rs 33.15 per kilogram on Monday, while the average prices of atta (wheat flour) stood at Rs 37.63 per kg.

Last month, the government announced plans to sell 30 lakh tonnes of wheat in the open market from its buffer stock under the OMSS.

Out of the 30 lakh tonnes, the FCI is selling 25 lakh tonnes to bulk consumers like flour millers through e-auction and 2 lakh tonnes to states/Union Territories. Three lakh tonnes of wheat are being provided to institutions and state-PSUs at a concession for converting wheat into wheat flour.

In the two rounds of e-auctions for bulk consumers, nearly 13 lakh tonnes wheat have been sold. FCI will offer 11.72 lakh tonnes of wheat during the third e-auction to be held on February 22.

Last week, the ministry reduced reserve price of fair and average (FAQ) quality wheat to Rs 2,150 per quintal, while for Under Relaxed Specifications (URS) wheat to Rs 2,125 per quintal. These new reserve prices are applicable from the third sale of wheat through e-auction.

Moreover, the rate of wheat has been reduced to Rs 21.50 per kg for sale to NCCF/NAFED/ Kendriya Bhandar/state government cooperatives/federations as well as community kitchen /charitable/NGO etc. for converting wheat into atta and then selling  to consumers at Rs 27.50 per kg.

To control price, the Centre had banned wheat exports in May last year. India's wheat production fell to 107.74 million tonnes in the 2021-22 crop year (July-June) from 109.59 million tonnes in the previous year due to heat waves in a few growing states.

The procurement fell sharply to 19 million tonnes this year from around 43 million tonnes last year.

Wheat production is estimated to rise at 112.18 million tonnes in the current 2022-23 crop year on higher acreage and better yield. However, the rise in temperature during this month in key producing states has again become a concern for the farm scientist and policy makers.

On Monday, the government formed a committee to monitor the situation arising out of any unusual rise in temperature and its impact on the wheat crop and issue necessary advisories to the farming community to save the crop.

The move comes as some parts of the country have started witnessing above-normal temperatures.

In the first week of February, the maximum temperature in major wheat growing areas, barring Madhya Pradesh, remained higher than the average of the last seven years, as per the National Crop Forecast Centre (NCFC).