Centre to sell 3 million tonnes of wheat in open market to cool prices

Atta prices from central wheat pool capped at Rs 29.50 kg; wheat stocks 24.4% above buffer requirement as on January 1

The Central government has decided to sell 3 million tonnes (mt) of wheat from its inventories through a special Open Market Sale Scheme (OMSS) to cool record high prices of the commodity.
 

According to an official statement, under the special OMSS, wheat will be subject to the stipulation that the buyer (flour mill owner) will convert wheat to atta and offer it to the public at a maximum retail price of Rs 29.50 per kg.
 

The government said under the scheme wheat would be offered to the flour millers and bulk buyers through e-auction for a maximum quantity of 3,000 tonnes per buyer, per auction, from a Food Corporation of India region.
 

That apart, wheat will also be offered to state governments and Union territories for their schemes without e-auction.
 

“Apart from the above channels, wheat will be offered at a concessional rate of Rs 2,350 per quintal also to PSUs or cooperatives or federations, kendriya bhandar/NCCF/NAFED etc without e-auction,” the statement read.
 

A decision to formally open up the granaries for private traders was taken at a high-level meeting of the Group of Ministers (GoM) headed by Union Home Minister Amit Shah on Wednesday. 
 

At present, wheat prices in north Indian markets are hovering around Rs 31-32 per kg, which is 50 per cent more than the minimum support price (MSP) for the 2023-24 season of Rs 21.25 per kg.
 

“The market price will immediately come down by Rs 2 per kg as soon as the sale starts, and this will have a cascading impact on flour rates as well,” a trader said.
 

He said the bulk of the wheat was lying in Punjab, Haryana, and Madhya Pradesh, from where it would be sold to flour millers and atta makers. He said the first sale tender was expected to be opened next week.
 

Data shows that as on January 1, India’s wheat stocks in the Central pool was estimated at 17.17 mt, which was 24.4 per cent more than the buffer and strategic reserve requirement.
 

Of the 17.17 mt, around 10.5 mt (almost 61 per cent) was with state agencies.
 

Meanwhile, sources said the condition of the wheat crop in most parts of the country was excellent and if temperatures did not rise sharply from February or March, India was on course to harvest a bumper crop.
 

An aggressive open market sale by the government would also help the Centre to build its inventories from the next crop, which will hit the market in the next couple of months, as the prevailing market rate is over 50 per cent higher than the MSP for the 2023-24 season, which is Rs 2,125 per quintal.