Govt sells 1.28 MT of wheat in open market since June
The Food Corporation of India (FCI) has sold 1.28 million tonne (MT) of wheat from its stock in the open market through weekly e-auctions, which commenced on June 28. However, it could sell only 32,520 tonne of rice since July 5.
On Wednesday, the corporation sold 0.16 MT of wheat, against 0.2 MT offered on the e-auction. In the case of rice, only 1,100 tonne was sold to bulk buyers, against 0.32 MT offered for sales.
To contain cereal prices, the government had announced the sale of 5 MT of wheat and 2.5 MT of rice from the central pool in the open market to bulk buyers.
The retail inflation in cereal and products category was reported at 13.04% in July, a decline from 16.12% in January. Inflation in cereals had been in double digits since October last year.
A food ministry official said that the FCI will continue to sell foodgrains from its surplus stocks till inflationary trend in cereals’ prices is curbed. As per an earlier policy, the corporation had been selling surplus wheat to bulk buyers during the lean season (January-March).
Currently, the FCI has 34.13 MT of rice, which includes 10.75 MT to be received from millers, against a buffer of 10.25 MT for October 1. In the case of wheat, the central pool stock is around 26.37 MT, against a buffer of 20.52 MT for October 1. The official said that grain stocks are above the buffer and sufficient to carry out open market sales.
The weighted average of the selling price of wheat declined to `2148/quintal on the e-auction on Wednesday from `2,254/quintal from the e-auction held three weeks ago.
In the case of rice, despite a `2/kg reduction in the base price of rice to `29/kg, against the economic cost of more than `36/kg, there has been a sluggish interest by traders in the open market sale. The weighted average of the selling price of rice declined to `2973/quintal from `3163/quintal from the e-auction on August 9.
To curb inflation in rice, the government has banned export of non-basmati white rice last month and imposed 20% exports duty on parboiled rice last week.
A minimum export price of $1200/tonne has been imposed on the basmati rice exports till October 15.
The FCI has also stopped providing rice to distilleries for ethanol manufacturing.
The government had imposed stock holding limits on wheat for the first time since 2008 for traders, wholesalers and retailers till March 31, 2024 last month to control increase in prices.
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