Edible Oil News in English

Government’s wheat from official reserves has many takers, nearly all quantity sold out

Source The Hindu Business Line.

Posted on December 12, 2024

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For the second consecutive week, there was nearly 100 per cent offtake recorded in the weekly e-auction under Open Market Sales Scheme (OMSS) for the 1 lakh tonne (lt) of wheat offered by the Food Corporation of India (FCI) from official reserves. A 100 per cent offtake was noticed in the first round of auction too.

In the e-auction held on December 11, over 1480 processors successfully awarded 99,815 tonnes of the grain, which shows that the price sensitive commodity market was waiting for it given the high market rates. In the first round, as many as 1,501 processors were awarded 98,700 tonnes, including a top company owning a national brand buying 100 tonne in Rajasthan.

According to the results of the e-auction, out of 23 states/region where bidding happened, 19 states have 100 per cent offtake while 3 states have between them 99 per cent and only the north-eastern region had 85 per cent. Still, there is improvement in the NE states also as the offtake was nearly 60 per cent in the previous week, officials said.

Sources said that for the top 10 consuming states – Uttar Pradesh, Punjab, West Bengal, Assam, Delhi, Bihar, Rajasthan, Haryana, Maharashtra and Gujarat — the Centre has offered over 70 per cent of the total 1 lt and as many as 1,062 bidders were successful in buying the entire 70,500 tonnes. The demand for FCI wheat is only due to the price as it has offered to sell at the minimum support price (MSP) plus transport and taxes.

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.

According to the results of latest auction, the highest price at which wheat has been sold has come from Assam at ₹3,393/quintal, which is ₹174 higher than previous week’s highest rate of ₹3,219/quintal. It is also closely followed by ₹3,333/quintal in Bihar (highest price in the state) and ₹3,252/quintal in Odisha.

The highest bid price was ₹3,197/quintal in West Bengal, ₹3,045/quintal in Punjab, ₹3,020/quintal in Rajasthan, ₹3,000/quintal in Haryana, ₹2,946/quintal in Delhi and ₹2,948/quintal in Uttar Pradesh. On the other hand, the highest price was ₹2,910/quintal in Karnataka, ₹2723/quintal in Kerala and ₹2,698/quintal in Tamil Nadu, which are lower than many of the wheat growing states.

On the other hand, the lowest price in the auction was noticed in Maharashtra at ₹2,465/quintal as Naturetwist Agro and RK Patel Food have been successful in getting 20 tonne each from Manmad (under Jalgaon zone) depot, sources said.

Trade sources said that some mills in Karnataka are able to buy at less than ₹2,700/quintal and ₹2,650 per quintal for maximum eligible quantity for the FCI wheat transported from Ludhiana whereas the current price is about ₹3,400/quintal if they buy from open market in Uttar Pradesh and take delivery at their mill in Karnataka.

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.

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Source : The Hindu BusinessLine