In first open market auction of 2024-25, FCI sells 98.8% of wheat on offer
This story was originally published at 14:29 IST on 5 December 2024
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--FCI official: Sold 98.8% wheat in 1st auction of 2024-25 open mkt sales Wed
--FCI official: Sold wheat at avg INR 2,885/100 kg vs INR 2,325 reserve rate
By Afra Abubacker
NEW DELHI – In its first auction of the year on Wednesday, the Food Corp. of India ended up selling 98.8% of the 100,000 tonnes wheat on offer under the open market sales scheme, an FCI official said. "It was a complete success. People wanted more wheat in almost every state," he added. To cater to higher demand, the agency is discussing the viability of increasing the quantity at the weekly auctions to 150,000 tonnes.
The weighted average selling price of wheat at Wednesday's auction was INR 2,885 per 100 kg against the reserve price of INR 2,325 per 100 kg, the official said. This was slightly lower than the all-India average wholesale price of INR 2,907 per 100 kg. For the current year 2024-25 (Apr-Mar), the government has set the reserve price of fair and average quality wheat at INR 2,325 per 100 kg and those for wheat under reduced specifications at INR 2,300 per 100 kg.
On Wednesday, FCI sold the entire allocated quantity of 14,000 tonnes of wheat in Uttar Pradesh, and sold 12,340 tonnes of the allocated 12,500 tonnes in Punjab, data from the corporation showed. The corporation had offered the highest amount of wheat to these two states.
"We have not yet compiled the zone-wise weighted average selling price," the official said. According to the FCI data, the highest bids received in Uttar Pradesh, Punjab, and Assam were INR 2,932 per 100 kg, INR 3,160, and INR 3,219 per 100 kg, respectively. In its Wednesday auction, almost all states had bid for more quantity of the wheat than offered, the data showed.
"They (millers and processors) are expecting 300,000-400,000 tonnes (wheat) in each auction," the official said. Wheat supply in the market is tight as FCI delayed offloading the grain from its godowns amid lower procurement and falling stocks. The corporation typically begins wheat auctions in July or August, but in 2024-25, FCI began weekly auctions only in December.
Asked if the agency planned to increase the quantity at auctions, the official said, "We are discussing whether to continue with 100,000 tonnes or increase it to 150,000 tonnes. We will consider looking into the stocks left with FCI," he added.
Through weekly auctions till the end of March, the FCI plans to sell 2.5 million tonnes of wheat to processors and millers. However, millers across major wheat-processing states say the quantity was not enough to meet the demand. Last year, FCI sold a record 9.4 million tonnes of wheat under the open market scheme.
The government has allowed FCI to sell only 2.5 million tonnes of wheat as the agency managed to buy 26.6 million tonnes from farmers in 2024-25, against the target of 30-32 million tonnes. In 2023-24, FCI had procured 26.2 million tonnes.
Further, wheat stocks with FCI as of Nov. 1 was 22.3 million tonnes, only 2% higher than a year ago. The government relies on FCI stocks to feed over 813 million people under various welfare schemes, including Pradhan Mantri Garib Kalyan Anna Yojana through the public distribution system.
Meanwhile, the offtake of rice at Wednesday's auction remained poor as new paddy crop arrivals are in full swing across the country. FCI sold 40,535 tonnes rice on Wednesday, out of the 61,120 tonnes offered, the official said.
The following is the state-wise wheat allocation and sales under the Open Market Sales Scheme on Wednesday as per FCI data:
State | Wheat allocated | Wheat sold |
Uttar Pradesh | 14,000 | 14,000 |
Punjab | 12,500 | 12,340 |
West Bengal | 7,000 | 7,000 |
Assam | 6,500 | 6,500 |
Delhi | 5,500 | 5,500 |
Rajasthan | 5,000 | 4,910 |
Maharashtra | 5,000 | 4,730 |
Karnataka | 5,000 | 4,870 |
Madhya Pradesh | 4,000 | 4,000 |
Total* | 100,000 | 98,820 |
*The figures may not add up as states with smaller quantities have been excluded from the table.
With inputs from J. Navya Sruthi
End
Edited by Akul Nishant Akhoury
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