Food Corporation of India (FCI) has been selling 920,000 tonnes of wheat through electronic auctions at a reserve price of Rs 2,474 per quintal since Wednesday, slashing prices by almost 10%.
The auction generated 229 billion rupees for the company on February 1 and 2, an official statement said.
Recently, the Center decided to offload 3 million tonnes from buffer stocks on the open market under the Open Market Sales Scheme (OMSS).
Of this, 2.5 million tons will be sold to bulk consumers and millers, 300,000 tons to institutions such as Nafed, and the remainder to state governments.
“Electronic auctions have left an impact, with market prices falling by more than 10% over the past week,” the food ministry said in a statement.
After the ban on wheat sold through e-auctions is lifted and wheat flour (atta) becomes available, the company said, “price will drop further.”
According to data maintained by the Ministry of Consumer Affairs, the average retail price of wheat across India was Rs 33.47 per kg on February 2, while the price of flour was Rs 38.1 per kg.
According to the data, on the same day in 2022, the average retail price of wheat and flour was Rs 28.11 and Rs 31.14 per kg respectively.
FCI has started selling 2.5 million tons to bulk users nationwide. He participated in electronic auctions in 23 states with more than 1,150 bidders. Due to a technical glitch, the electronic auction in Rajasthan was held on his February 2nd.
Otherwise, the FCI will hold electronic auctions every Wednesday through March 15th.
According to the government, there was demand for 100-499 tons, 500-1,000 tons and 50-100 tons, so small and medium-sized millers and traders actively participated in the auction.
Only 27 bids received more than 3,000 tonnes at one time, he said.
Meanwhile, FCI has allocated 250,000 tonnes to institutions such as Kendriya Bhandar, Nafed and National Cooperative Consumers Federation to convert the grain into atta and sell it at a retail price of up to Rs 29.50 per kg.
Kendriya Bhandar has started selling flour at a lower price, and Nafed plans to sell it in eight states in the near future at the same price.
Domestic wheat and flour prices have remained firm due to tight domestic supply due to declining production.
Under the OMSS policy, the government allows the FCI to sell food grains, especially wheat and rice, on the open market at predetermined prices to bulk consumers and private traders.