Govt cuts reserve price of FCI wheat to Rs 2,150 per quintal for bulk users

On April 1, the country would have a wheat stock of 96 lakh tonnes, just above the buffer norm requirement of 75 lakh tonnes

Press Trust of India New Delhi

The government on Friday further reduced the reserve price of FCI wheat to Rs 2,150 per quintal for bulk consumers under the Open Market Sale Scheme (OMSS) in a bid to check prices.

According to the food ministry, the reserve price of fair and average quality (FAQ) wheat has been reduced to Rs 2,150 while for Under Relaxed Specifications (URS) wheat to Rs 2,125 per quintal.

These rates will be applicable till March 31, the ministry said.

State-run Food Corporation of India (FCI) is offloading 25 lakh tonnes of wheat to bulk users under the OMSS.

"Reduction in reserve price will help in reducing market price of wheat and wheat products for consumers," the ministry said.

States are allowed to purchase wheat from FCI for their own scheme at above proposed reserve prices without participating in e-auction, it added.

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On February 10, the ministry had done away with freight charges and kept the reserve price of FCI wheat uniformly at Rs 2,350 per quintal to bulk users pan-India through e-auction.

It had also reduced the price of FCI wheat offered to institutions like Nafed, NCCF and Kendriya Bhandar to Rs 21.50 per kilogram from Rs 23.50 per kg. These institutions were offered wheat for converting the grain into flour and sell it at a maximum retail price of Rs 27.50 per kilogram instead of Rs 29.50 per kg.

FCI has already sold 13.11 lakh tonnes of wheat out of 25 lakh tonnes to traders, to flour mills etc. in the course of the first two e-auctions held during February 1-2 and 15. The next auction will be held on February 22.

Last month, the government announced plans to sell 30 lakh tonnes of wheat in the open market from its buffer stock under the Open Market Sale Scheme (OMSS) in order to check rising wheat and wheat flour prices.

Out of the 30 lakh tonnes, Food Corporation of India (FCI) will sell 25 lakh tonnes to bulk consumers like flour millers through e-auction, 2 lakh tonnes will be given to states/Union Territories and 3 lakh tonnes to institutions and state-PSUs at concessional rates for converting wheat into wheat flour.

FCI, the government's nodal agency for procurement and distribution of foodgrains, had around 156.96 lakh tonnes of wheat as of January 26 in the buffer stock.

On April 1, the country would have a wheat stock of 96 lakh tonnes, just above the buffer norm requirement of 75 lakh tonnes.

Under the OMSS policy, the government allows FCI to sell food grains, especially wheat and rice, at predetermined prices in the open market from time to time to bulk consumers and private traders.

The purpose is to boost the supply during the lean season and moderate the general open market prices.

The Centre had banned wheat exports in May last year to control prices, after a slight fall in domestic production and a sharp decline in the FCI's procurement for the central pool.

India's wheat production fell to 106.84 million tonnes in the 2021-22 crop year (July-June) from 109.59 million tonnes in the previous year due to heat waves in a few states.

The procurement fell sharply to 19 million tonnes this year from around 43 million tonnes last year.

However, wheat production this year is projected to be at a new record of 112.18 million tonnes. The procurement of new wheat crop would commence from March 15.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Feb 17 2023 | 8:47 PM IST

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