The government has given its nod to sell 30 lakh tonnes of wheat from its buffer stock in the open market to cool down prices of wheat and atta which has touched their highest in 10 years.
The Committee of Ministers (CoM) approved the move at a meeting on prices of essential commodities chaired by home minister Amit Shah.
Process timeline
The wheat will be sold from Food Corporation of India (FCI) stock through e-auction under open market sale scheme (OMSS).
The FCI had around 171.70 lakh tonnes of wheat as on January 1 in the buffer stock.
It will start the process of e-auction of stocks immediately throughout the country from January to March 2023.
The entire quantity will be offloaded in two months.
About the scheme
As per the OMSS scheme 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 objective is to boost supply during the lean season and moderate the general open market prices.
“Offloading of 30 LMT wheat in the market through the Open Market Sale Scheme (Domestic) within a span of two months through multiple channels will have wider reach as well as an immediate impact on the soaring wheat and atta (wheat flour) prices and will help contain the rising prices and will bring much relief to the common man,” the Ministry of Consumer Affairs, Food & Public Distribution said in a statement.
Rules in place
This sale will be done via traders, state governments, cooperatives and federations in the next two months at a concessional rate of Rs 2,350 per quintal and the buyers will bear the transport cost.
The bidders quoting maximum price would cinch the deal.
In order to ensure that only a few wouldn’t hog the entire amount, a maximum quantity of 3,000 tonnes per buyer per auction will be allowed from one FCI region.
For government entities
The agency will also offer wheat at a concessional rate of Rs 2,350 per quintal specially to government entities such as PSUs, cooperatives, federations, Kendriya Bhandar and NAFED without having to go through e-auction.
The sale under this special scheme will be subject to the stipulation that the buyer will convert wheat to atta and offer it to the public at a Maximum Retail Price of Rs 29.50 per Kg.
“This will help reduce the prices in urban areas where these entities have more presence,” said an official.
Ultimate impact on price for the common man
The Roller Flour Millers Federation of India (RFMFI) welcomed the government’s move and said that it will result in a reduction in wheat and wheat flour (atta) prices by Rs 5-6 per kg.
The CoM took the decision to offload the stock on a day when the average retail price of wheat was Rs 33.3 a kg, up from Rs 28.24 per kg a year ago.
The average price of atta stood at Rs 37.95 per kg against Rs 31.41 per kg a year ago.
Data show that FCI’s current wheat stock is around 158 lakh tonnes against the buffer norm of 138 lakh tonnes.
