FCI to offer wheat at Rs 2,350 per quintal, Rs 300 less than base price

Commodity's prices reduce by Rs 450 a quintal after announcement of sale

The Food Corporation of India (FCI) will offer the entire 2.5 million tonnes (mt) of wheat meant for e-auction across India in one go at a base price of Rs 2,350 per quintal plus freight. The base price is aro­und Rs 300 less than the economic cost — which includes procurement, storage, and han­dling — senior officials said. The economic cost of wheat is estimated to be around Rs 2,654 per quintal.

“The first tender will be up for participation immediately and the auctions will be held every Wednesday, starting from the coming week. All states with FCI depots will participate in the auctions, but the maximum quantities will be offered from depots located in Punjab and Madhya Pradesh, as these are places where highest quantities of wheat are stored,” FCI chairman Ashok Meena told reporters.

Wheat prices dropped almost Rs 450 per quintal at markets in Delhi and closed at Rs 2,730-2,750 per quintal after the announcement of the stock sale, traders said.

Under the open market sale, the modalities of which were finalised, of the 3 mt of wheat allocated for sale in the open markets, 2.5 mt would be sold through open e-auction, while around 200,000 tonnes would be sold to state governments at the rate of 10,000 tonnes per state for distribution in their own welfare schemes.

The remaining 300,000 tonnes would be allocated to agencies such as National Agricultural Cooperative Marketing Federation of India (Nafed), National Cooperative Consumer Federation (NCCF), and others for conversion into atta (wheat flour), which can then be sold at a fixed price of Rs 29.50 per kg.

“In the e-auction, depots located in Madhya Pradesh and Punjab will sell 500,000 tonnes each, which is highest across India, while depots in Maharashtra will sell around 400,000 tonnes, West Bengal around 125,000 tonnes, and Haryana around 100,000 tonnes,” Meena said.

Officials said in the past the majority of the bids were placed near the base price.

 

Meena said the last tender that will mark the conclusion of the sale would be issued on March 15, after which the new crop would hit the market.

“Exports have been banned and the new wheat crop will start arriving from March 15. Therefore, it remains to be seen how long traders can hold on to their existing stocks,” another official who was present at the press meet said.

Meena said even after providing for the 3 mt of wheat through the open sale, the Centre would be left with enough stock to maintain a healthy buffer and strategic reserve by the end of March 31, 2023. At present, India has wheat stock of around 15.96 mt, which will reduce to around 9.6 mt by March end, as per the government’s estimate. This will be more than 7.5 million tonnes required to maintain a healthy buffer and strategic reserve. In case of rice, the FCI officials said that till January 26 around 63.5 million tonnes of paddy had been procured which is around 2 per cent more than the same period last year.

“We had targeted to reach 60 mt of rice procurement and are on course to reach that and will definitely touch last year’s procurement levels of 59.2 mt of rice,” Meena said.