India may hike reserve price of wheat in open market sale
the Food Corporation of India (FCI) I decided to provide 5 thousand tons (litres) of wheat For sale on the open market during the first round of online auction for which bids may be requested on June 23. However, since the maximum amount is blocked at 100 tons per entity in each auction round, real users may not participate in this year. Open Market Selling System (OMSS)Some industry experts said.
Sources said that the center is reviewing reserve prices for wheat to be sold through the open market sales system. This is because the reserve price is lower than the prevailing prices in the APMC arenas and traders may attempt to put the shares for sale.
As a result, they said, processors, especially rotary flour millers, may have to buy from these dealers by paying additional prices. Besides, the issue of reserve price has also become a bone of contention between the processors and the government.
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The processors are said to have informed the Ministry of Food that they had bought wheat from the Mands during the harvest season upon an appeal from the government. “Now,” said one flour miller, “if the grain is sold at rates much lower than the prevailing market prices, and that too at a uniform rate throughout the country, it will not be possible for them to lower the prices.”
The government recently announced the sale on the open market of 15 liters of wheat from shares held by FCI at a flat rate of $1,125/quintal for the URS variety and $2,150/quintal for the FAQ variety. Of the 262 liters of wheat purchased for the central pool this year, more than 72 percent is under a variety of comfort specifications (URS).
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‘Hard choice’
“The government had two options, either to allow the processors to participate without any guarantee that the stock lifted from the FCI would be used immediately or to allow the middlemen to participate and distribute the pills further at a higher price to the real users. It was really a hard choice,” said an industry expert.
Apart from OMSS, the government on June 12 also announced restrictions on wheat stocks to check price increase as mandi prices increased by 8 percent in one month.
The price of the all-India mandi fell to ₹2,295/quintal on 12 June from ₹2,307/quintal on 5 June as a result of the announcement. However, the rate has risen again to ₹2,310/quintal as of June 19, according to official data.