Govt Cuts Reserve Price of Wheat Till March 31, 2023 to Stabilize Inflation

The Department of Food and Public Distribution (DFPD) announced on February 17 that it will lower the reserve price of wheat until March 31, 2023. The reduction is intended to counteract the food economy's inflationary trend.

According to a press release from the Centre, the reserve price under the Open Market Sale Scheme (Domestic) OMSS (D) has been set at Rs 2150/Qtl (Pan India) for wheat (FAQ) and Rs 2125 Qtl (Pan India) for wheat (URS) of all crops, including RMS 2023-24 for sale of wheat to private parties.

The DFPD also allows states to purchase wheat from FCI at prices higher than the proposed reserve price without participating in the e-auction. On 17 February, FCI will hold a third e-auction for the sale of wheat at these revised reserve prices, which will be open on 22 February.

The Ministerial Committee decided to release 30 LMT of wheat from FCI stock through the Open Market Sale Scheme (OMSS). 

This includes 25 LMT being offered through the e-auction route to traders, flour mills, and others, as is customary for FCI. Bidders can participate in an e-auction for up to 3000 MT per region per auction. Without an e-auction, 2 LMT will be offered to state governments for their schemes at a cost of $10,000 per state.

Without an e-auction, 3 LMT will be offered to government PSUs/cooperatives/federations such as Kendriya Bhandar/NCCF/NAFED, among others.

As a result, the Department has allocated 3 LMT of wheat to Kendriya Bhandar, NAFED, and NCCF in accordance with their requests. Kendriya Bhandar, NAFED, and NCCF each received 1.32 LMT, 1 LMT, and 0.68 LMT.

Furthermore, on February 10, the price of wheat was reduced to Rs 21.50/Kg for sale to NCCF/NAFED/ Kendriya Bhandar/State Govt. Cooperatives/ Federations, etc., as well as community kitchens/charitable/NGO, etc., with the condition that they convert the wheat to atta and sell it to consumers at the MRP of Rs 27.50/Kg.