India fixes wheat reserve price for open market sale at ₹2,300/quintal
The Indian government has announced the open market sale scheme (OMSS) policy under which the reserve price of wheat has been fixed at ₹2,300 per quintal and rice at ₹2,800 per quintal. This time, the Government has said transport costs will be added to the reserve price, unlike last year when there was one rate across the country.
The Food Ministry said “the quantum of stocks to be offloaded and timing of e-auction, considering stocks holding at the relevant point of time may be decided by the Food Corporation of India (FCI) in consultation with the Ministry. It has further stipulated that only a surplus above the combined requirement to run the National Food Security law and other welfare schemes, be released without touching the buffer norms and additional quantity of 2 million tonnes (mt).
Stocks on July 1
As the annual requirement of wheat under public distribution system and other schemes is about 18.4 m, whereas the buffer norm on April 1 is 7.46 mt; the Government will have to set side for OMSS the quantity above 27.9 mt. The FCI had 28.26 mt of wheat and 48.5 mt of rice (including 23.71 mt of paddy in terms of rice) in the Central Pool stock on July 1, 2024.
“For millers, this step was most awaited and is a welcome one. But, this time freight will be added, which was demanded by industry. Last time in northern States, OMSS wheat sale was less as millers in the South were directly purchasing from FCI on the same rate,” said Rahul Chauhan of IGrain India. Due to the uniform rate across the country, there was a record sale 10 mt wheat under OMSS during 2023-24, he said.
The new policy will allow trade to work independently as they were doing earlier, Chauhan said and hoped that more quantity of wheat will come to the market reducing burden on FCI.
From August 1?
However, some experts question the government’s decision as it was earlier claimed as an achievement under One Nation One Rate slogan and there is no justification given as to why it is removed now.
The policy also allows the sale of wheat from FCI to Central Cooperative organisations, like NAFED, NCCF and Kendriya Bhandar for the purpose of direct sales to consumers under “Bharat” at ₹2,300/quintal. The Centre also pays about ₹10 subsidy from the Price Stabilisation Fund to these agencies to sell atta at ₹275 per 10-kg bag.
While the OMSS policy will be valid till Match 31, 2025, the rice policy has been made with retrospective effective from July 1 and that of wheat can start from August 1, if the Government permits FCI.