Food Corporation of India Sells 3.85 Lakh Tonnes of Wheat in Open Market

Food Corporation of India (FCI) has sold twenty five percent of the wheat offered for sale during the second round of e-auction, held on February 15. This translates to around 3.85 lakh tonnes of the total 15.25 lt of wheat offered for sale in open market.

The weighted average price observed in the second round stood at ₹2,338.01/quintal average realized price was ₹2,474/quintal in the first round while the average realized price was ₹2,474/quintal in the first round, as stated by the Food Ministry.

The Government announced a uniform price for wheat all over the country, cutting down the reserve price to announcing ₹23/kg Under Relaxed Specifications (URS) category and ₹23.50/kg fair average quality (FAQ) quality. Earlier, the freight cost was getting added either from Bhopal or Ludhiana.

The early arrival of the fresh harvest is why the offtake has decreased from 42% in the first round to 25% in the second round, according to dealers. In contrast to the previous round, which saw over 1,150 bidders, the second round saw as many as 1,060 traders and millers engage in the auction.

“The government had anticipated a decrease in ₹2/kg as announced in the sale price for cooperatives. However, prices have fallen by ₹1.36/kg in the current auction. Some further action can help the government reduce prices.” Said a former Chairman of FCI. There are rumors of a reduction in reserve prices by ₹2/kg in the next round of e-auction.

According to food secretary Sanjeev Chopra, the wheat prices would further come down in the next few weeks, in line with the policy decisions of the government.

The food ministry reduced the price of wheat last week from 23.50 to 21.50 per kilogramme for sale to NCCF, NAFED, Kendriya Bhandar, States, as well as community kitchens, philanthropic organisations, and nongovernmental organisations running relief camps for migratory workers and vulnerable groups. The requirement that whole wheat be processed into atta and sold at an MRP of $27.50/kg applies to this subsidised rate. Atta's previous price cap was a maximum of 29.50/kg. Over 25/kg is the economic price.

The maximum demand was for 100-499 tonnes, followed closely by 500-1000 tonnes and 50-100 tonnes; all of which pointed to the participation of small and medium flour millers and traders. Only 5 bids came for the largest quantity of 3000 tonnes at one go.

The government has determined that FCI will sell wheat by e-auction nationwide every Wednesday through the second week of March in order to address the rising cost of wheat and atta.

The government has provided 5 lt to states, cooperatives, and small traders to lift wheat at reserve prices without taking part in the e-auction in addition to the 25 lt earmarked for the e-auction. NCCF Limited (National Cooperative Consumers' Federation of India Limited) has been given permission to lift 68,000 tonnes, 1 lb of NAFED, and 1.32 lb of Kendriya Bhandar.