FCI sells 21 per cent of 4.08 lt wheat offered at average price of Rs 2,136/quintal
The government sold only 85,580 tons of the 4.08 thousand tons of wheat Offered for sale under the Open Market Sale Scheme (OMSS), in the first round of online auction.
The beans were sold at a price below the fair and medium quality (FAQ) reserve price as a large quantity (70 percent of the total) was served under the URS package.
The government has set reserve price 2,125 rupees/quintal for URS variety, and 2,150 rupees/quintal for FAQ set, for its economical cost of 2,703 rupees/quintal. The average price across India at the agricultural market square (mandi) was Rs 2,307 per quintal on June 28, the day the online auction was held by Food Corporation of India (FCI), according to Agmarknet portal.
On the other hand, data from the Ministry of Consumer Affairs shows that the typical retail price (average selling price of the maximum quantity) of wheat was Rs 25/kg and the wholesale price was Rs 2,200/quintal on June 28.
“There was low enrollment from dealers amid confusion about who dealers could sell to after the grain was lifted from the FCI. Clarification on a ‘bulk buyer’ wasn’t issued until after the EMD deadline expired,” said one flour miller. He added that the clause on FSSAI compulsory licensing was also a hurdle because many dealers did not have them.
FCI’s June 28 online auction showed the buyout was 17 percent in the case of the FAQ group and 23 percent in the URS-type wheat.
Trading sources said Himachal Pradesh, which had the lowest allotment, reported a maximum purchase of 1,500 tons out of the 1,700 tons offered at an average price of Rs 2,148/quintal. Kerala had the lowest bid of 900 tons sold at an average of Rs 2,147/quintal, against the 20,000 tons offered by FCI.
The lowest average price in the online auction was 2,127 rupees/quintal in Haryana and the highest price was 2,158 rupees/quintal in Telangana. The pan-India average selling price was Rs 2,136/quintal in the online auction, with FCI realizing around Rs 183 crore.
West Bengal, which offered 40,500 tons in the first round, saw less than 20 per cent buy, and the average price was Rs 2,144 per quintal.
Of the total amount supplied, up to 66 per cent has been allocated in 10 states, which face a monthly drop of nearly 6 liters in wheat allotments under the National Food Security Act (NFSA) starting May 2022. However, the OMSS in these states was 18.25 per cent. cent, which appears to be a reflection of lower leakage of grain distributed through ration shops.
“If there had been a leakage as envisioned, buying would certainly have been higher in these states, as so-called regular buyers would have returned to the OMSS, as they must have been nervous about the open market after the cut in wheat allocation,” an official source said.
According to government tenders put out by Food Corporation of India (FCI), up to 48,920 tonnes of 2.68 litres allocated under the FSA have been sold in Bihar, Jharkhand, Odisha, West Bengal, Delhi, Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh and Tamil Nadu.