FCI sells 21 per cent of 4.08 lt wheat offered at average price of Rs 2,136/quintal
The government has sold only 85,580 tonnes of the 4.08 lakh tonnes (lt) of wheat offered for sale under the open market sale scheme (OMSS), in the first round of e-auction.
The grain was sold at lower than the reserve price of fair and average quality (FAQ) as a substantial quantity (70 per cent of total) was offered under the relaxed specification (URS) variety.
The government had fixed a reserve price of Rs 2,125/quintal for URS variety, and Rs 2,150/quintal for the FAQ variety, against its economic cost of Rs 2,703/quintal. The all-India average price at the agriculture market yard (mandi) was Rs 2,307 per quintal on June 28, the day the e-auction was held by the Food Corporation of India (FCI), according to the Agmarknet portal.
On the other hand, data from the Consumer Affairs Ministry shows the modal (average selling price of maximum quantity) retail price of wheat was Rs 25/kg and the wholesale price was Rs 2,200/quintal on June 28.
“There was low registration from traders amid confusion over who the traders can further sell to after lifting the grain from FCI. The clarification on ‘bulk buyer’ was issued only after the deadline on EMD got over,” said a flour miller. The clause on mandatory FSSAI licencee was also a hurdle as many traders did not have it, he added.
FCI’s e-auction on June 28 shows offtake was 17 per cent in case of the FAQ variety and 23 per cent in URS type wheat.
Himachal Pradesh, which had the lowest allocation, reported maximum offtake of 1,500 tonnes of the 1,700 tonnes offered at an average price of Rs 2,148/quintal, trade sources said. Kerala had the lowest offtake at 900 tonnes sold at an average Rs 2,147/quintal, against 20,000 tonnes offered by FCI.
The lowest average price in the e-auction was Rs 2,127/quintal in Haryana and the highest Rs 2,158/quintal in Telangana. The pan-India average selling price was Rs 2,136/quintal in the e-auction, in which FCI realised about Rs 183 crore.
West Bengal, which was offered 40,500 tonnes in the first round, saw offtake of below 20 per cent, and the average price was Rs 2,144 per quintal.
Of the total quantity offered, as much as 66 per cent was allocated in 10 states, which face a monthly reduction of nearly 6 lt in wheat allocation under the National Food Security Act (NFSA) starting from May 2022. However, the combined offtake under OMSS in these states was 18.25 per cent, which seems to be a reflection of lower leakage of grains distributed through ration shops.
“Had there been leakage as perceived, offtake would have definitely been higher in these states, as the so-called regular buyers could have returned to OMSS, as they must be souring from open market after the cut in wheat allocation,” an official source said.
According to state-wise tenders floated by the Food Corporation of India (FCI), as much as 48,920 tonnes of the 2.68 lt allocated under OMSS, was sold in Bihar, Jharkhand, Odisha, West Bengal, Delhi, Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh and Tamil Nadu.
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