FCI to e-auction 25 lt of wheat to bulk buyers from Feb 1

State-owned Food Corporation of India (FCI) plans to sell 25 lakh tonnes (lt) of wheat to bulk consumers and will start a weekly e-auctioning from February 1 at a reserve price of Rs 2,350 per quintal plus freight cost.

A day after the government announced plans to sell 30 lt of wheat in the open market from its buffer stock under the Open Market Sales Scheme (OMSS) in order to check rising wheat and wheat flour prices, FCI Chairman and Managing Director (CMD) Ashok K Meena disclosed this to media persons in New Delhi.

Out of 30 lt, the FCI will sell 25 lt to bulk consumers like flour millers through e-auction, 2 lt will be given to States/Union Territories (UTs) and 3 lt to institutions and state PSUs at concessional rates for converting wheat into wheat flour and then selling it at not more than Rs 29.50 per kg.

Meena said, "The tenders would be up today, and the e-auction will take place on Wednesday." The auction will be held weekly every Wednesday. The first auction will take place on February 1 and will continue till March 15, when the new crop will arrive, he said.

Wheat will be offered at a reserve price of Rs 2,350 per quintal plus freight charges. A single buyer can quote for a maximum quantity of up to 3,000 tonnes and a minimum of 10 tonnes, he noted. "We hope small traders and small flour mill owners will take this opportunity," Meena said.

Regional offices have been directed not only to float the tenders for the e-auction of wheat but also to encourage local flour millers, traders and wheat product makers to register themselves on the FCI platform so that they can participate in the e-auction.

According to the FCI chief, wheat stock is available across the country, and all the states will be able to provide the stock. About 5 lt each will be offered in Madhya Pradesh and Punjab, 4 lt in Maharashtra, 2.5 lt in Rajasthan, 1.55 lt in Bihar, 1.25 lt in West Bengal and 1 lt in Haryana.

The reserve price fixed for wheat is equal to the acquisition cost and is just below the economic cost of Rs 2,654 per quintal. Initially, the old stock will be offered for sale and the new crop will be sold depending on the demand.

FCI, the government's nodal agency for procurement and distribution of foodgrains, had around 156.96 lt of wheat as on January 26 in the buffer stock. On April 1, the country would have a wheat stock of 96 lt, just above the buffer norm requirement of 75 lt.

Under the OMSS policy, the government allows FCI to sell food grains, especially wheat and rice, at predetermined prices to bulk consumers and private traders in the open market from time to time. The purpose is to boost the supply during the lean season and moderate the general open market prices.

The Centre had banned wheat exports in May last year to control prices, after a slight fall in domestic production and a sharp decline in the FCI's procurement for the central pool. India's wheat production fell to 106.84 million tonnes (mt) in the 2021-22 crop year (July-June) from 109.59 mt in the previous year due to heatwaves in a few growing states.

The procurement fell sharply to 19 mt this year from around 43 mt last year. The area under coverage for wheat crops in the current Rabi (winter-sown) season is slightly higher. The procurement of new wheat crops would commence on March 15.

Meena also said that the government's rice procurement was likely to touch last year's level of 592 lt in the ongoing 2022-23 marketing year ending September, despite an estimated fall in Kharif output.

"The way paddy procurement is happening, we expect total rice procurement will reach last year's level of 592 lakh tonnes," he said.

While the target is 600 lt, about 426 lt of rice has already been procured till January 26 this year as against 410 lt in the year-ago period, he said.

The country's rice production is estimated at 104.99 mt for the 2022-23 crop year (July-June), down from 111.76 mt in the previous year as per the initial government estimates.