FCI Wheat Auction: Up to ₹475/quintal fall in highest price after rejig in allocation quantity
The e-auction conducted for sale of wheat under the open market sale scheme (OMSS) by the Food Corporation of India on Thursday showed a fall of up to ₹475/quintal in the highest price from the previous round on December 18.
For the current round of auction, held on Thursday, the government had made some changes in allocation quantity among States while keeping the total weekly offer same at 1 lakh tonnes (lt) as in previous weeks.
Accordingly, combined offered quantity for Odisha (by 500 tonnes), Telangana (by 700 tonnes), Chhattisgarh (by 1,000 tonnes), Uttar Pradesh (by 1,000 tonnes), Assam (by 1,500 tonnes), Bihar (by 2,000 tonnes), Punjab (by 2,000 tonnes) and West Bengal (by 2,000 tonnes) was increased by 10,700 tonnes while allocation for Delhi, Gujarat, Rajasthan, Madhya Pradesh, Maharashtra, Haryana, J&K, Kerala, Tamilnadu, Uttarakhand, Himachal Pradesh, Andhra Pradesh and NE region were reduced by same quantity.
The highest price at which wheat was sold in Uttar Pradesh witnessed an increase of ₹3 per quintal while in all other States, where quantity was hiked, reported a drop in the highest rate in the range of ₹71-475/quintal. Telangana had maximum fall of ₹475/quintal in the highest bid price while Assam had ₹71/quintal.
Punjab had ₹150/quintal fall while West Bengal had ₹154/quintal drop and Bihar had ₹169/quintal dip in the highest price, compared with the previous round of auction. Chhattisgarh too had ₹300/quintal fall in highest price, trade sources said.
Marginal increase
On the other hand, the major States, where the weekly offered quantity got reduced, reported marginal increase in the highest rate between ₹20-99/quintal.
“The government should further increase the quantity for Punjab as the supply is completely dry and the millers are dependent on FCI wheat. Also the auction should continue in the State till March-end,” said a former president of Punjab Flour Millers’ Association.
In the e-auction held December on 26, 99,465 tonnes of the grain that got sold out as was the same during the last three rounds of auction.
According to the results of the e-auction, out of 23 States/region where bidding happened, 14 States have 100 per cent offtake (as against 19 in first round) while 2 States had more than 99 per cent and only the north-eastern region had 92 per cent. The NE states had 60 per cent offtake in the first round of auction, the sources said.
The Food Ministry in the OMSS policy has fixed the reserve price at ₹2,325/quintal for fair and average quality (FAQ) and ₹2,300/quintal for the category under relaxed specifications (URS) excluding transport and taxes. But, the reserve price for each depot in the States are different as the government has added the transport cost (from procurement point to depot) and mandi taxes.
The government has introduced some new norms this year in OMSS wheat with the objective of keeping the processors out of the tender process if they have “excess stock”. Each bidder has to submit an undertaking saying he does “not have wheat stocks over and above” his monthly processing capacity (on the basis of weekly wheat stock declaration on the WSMS portal).
The Food Ministry on November 27 had announced allowing FCI to offload 25 lt of wheat in market under the Open Market Sales Scheme through e-auction to flour mills and other manufacturers of wheat products, processors and end users by March 31, 2025.