FCI Sells 4.91 LMT Wheat to 970 Bidders in 6th e-Auction

Out of 1.6 MT of wheat offered by FCI to bulk buyers in the last pan-India e-auction, 970 bidders from 23 regions purchased wheat at an average price of '2,214/quintal, compared to the Minimum Support Price (MSP) of '2,125/quintal set for the next procurement season (2023-24), which begins on April 1.

"The sale has had a significant impact on the price of wheat and atta throughout the country, which is likely to remain stable with future tenders for open sale of wheat," the food ministry said in a statement.

Wheat market prices have dropped to close to MSP through open market sales, from 3,000/quintal at the start of the year. Meanwhile, the Roller Flour Millers' Federation of India said on March 16 that prices of wheat and wheat flour (atta) have dropped by Rs 6-8 per kg in the last two months to the Rs 23-24/kg range, following the government's decision to sell grain in the open market beginning February 1.

In the 2022-23 crop year, the federation anticipates a record wheat harvest of 108-110 MT (July-June). According to the federation, the government will be able to procure 34 MT of wheat in the upcoming procurement season due to record production and lower wheat prices. So far, FCI has made around '7,000 crore from selling wheat on the open market. The corporation is likely to continue selling wheat on the open market in non-procuring states until the end of the current month.

So far, the government has approved the sale of 5 million tonnes of wheat in the open market, including 540,000 tonnes allocated to state governments and agencies such as NAFED, Kendriya Bhandar, and NCCF for the sale of flour (atta) at a maximum retail price of '27.50/kg.

As of March 16, the FCI had 10.7 MT of wheat stock, with a buffer requirement of 7.4 MT for April 1, 2023. According to the food ministry's estimate, wheat stocks held by FCI on April 1, 2023 would be around 9.7 MT, with a buffer of 7.4 MT. In February 2023, retail wheat inflation reached 25.37% year on year.

The government allows FCI to sell food grains, particularly wheat and rice, at predetermined prices in the open market to bulk consumers and private traders on a regular basis under the open market sale policy.

The goal is to increase supply during the lean season and moderate prices. The agriculture ministry's forecast of a record wheat harvest of 112.18 MT for the 2022-23 crop year (July-June) has boosted the government's procurement drive for the next marketing season, which begins on April 1.