FCI sells 2.84 lakh tonnes of wheat at average ₹2,234/quintal in latest e-auction

The government, through the Food Corporation of India (FCI), sold 2.84 lakh tonnes (lt) of wheat in the open market sale scheme through e-auction on November 15, which is about 95 per cent of 3 lt of total quantity offered for sales to the processors. After raising the offered quantity in the auction, the government has been able to lower the selling rates of wheat.

Against the reserve price of ₹2,127/quintal in the e-auction, weighted average selling price was ₹2,234, which is lower from ₹2,252 in the previous week, sources said.

The government announced a hike in wheat MSP for next rabi marketing season (April-March) to ₹2,275/quintal from ₹ 2,125 and this resulted in some upward moments in retail prices. However, by announcing that more wheat will be off loaded by it, the government has been able to put a brake on rising prices, the official said.

In Wednesday’s results, prices came down to levels seen a month ago. In the auction on October 26, average wheat selling price rose to ₹2,311 from ₹2,260/quintal the previous week, prompting the government to announce measures to rein in prices.

The government has decided that the sale for wheat under the open market sale scheme (OMSS) will continue till March 31, 2024, and 101.5 lt will be offloaded by then to keep the prices in check,” the Food Ministry said in October.

Karnataka an exception

Trade sources said despite offloading 1.3 lt in northern States, the average selling price was same as national average whereas in South, the average selling price was about ₹2,204, with the exception of Karnataka where rates were higher compared to other neighbouring States.

In Karnataka, out of 74 successful bidders, as many as 24 processors offered to buy wheat at ₹2,400/quintal or more and the highest price was ₹2,575. In West Bengal, the highest selling price for the FCI wheat was ₹2,485, in Rajasthan ₹2,355 and in Punjab, it was ₹2,450. On the other hand, the highest offered price in Tamil Nadu was ₹2,135, trade sources said.

The government has taken a number of steps to keep wheat prices under check. While traders have been kept out of the auction by allowing only processors to take part, last week it raised the per bidder quantitative cap to 200 tonnes from 100 tonnes in each round so that higher availability is ensured.