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Informist, Monday, Dec. 8, 2025

 

--FCI official: Govt to halt wheat open market sales scheme from Wednesday

 

By Afra Abubacker

NEW DELHI – The government has suspended e-auctions of wheat under the open market sale scheme for 2025-26 from Wednesday, officials from the Food Corp. of India said. In its previous wheat auctions, FCI had barely sold 40% of its offering.

 

"There is no auction on Wednesday," an FCI official told Informist. Auctions have been suspended after some internal deliberations, other FCI officials said, declining to comment any further.  

 

The Food Corp. of India had started wheat auctions for 2025-26 on Nov. 12, and since then only two auctions have been held after it shifted to fortnightly auctions from weekly ones due to weak sales and poor buying interest from millers and processors amid ample market supplies.  

On Nov. 26, even after offering wheat on a fortnightly basis, wheat sales from FCI struggled to pick up. FCI sold nearly 80,000 tonnes, or about 40% of the 200,000 tonnes being offered. While overall lifting remained subdued, demand varied sharply across states, with about 80-100% offtake in Punjab and Haryana.

The abrupt pause in wheat auctions and absence of clear communication has fuelled market speculation about what may have prompted the sudden suspension. "There is speculation that auctions have been put on hold at the Roller Flour Millers' Federation's request following their recent meeting with the food ministry," Ajay Goyal, chairman, Wheat Products Promotions Society, said. "But the federation has denied making any such request to the government."  

"It is surprising that the ministry is being influenced by a trade body's requests," a miller said. "The government is using poor offtake as an excuse to suspend auctions and hold back supplies."  

 

There was a narrative that the government was "dumping wheat already in a dead market" and pressuring market prices, Goyal said. However, that was not entirely the case across the country. States such as Punjab and Assam needed government's wheat supplies to meet demand as reflected in the last auction's results.

 

"Haryana had 100% offtake. It makes no sense to suspend auctions when some states have ample demand," the miller quoted above said. "Instead of stopping auctions altogether, they could have reduced quantities in states with poor lifting," he added. On Nov. 26, FCI had offered 25,000 tonnes in Punjab and sold 22,000 tonnes. In Assam, the corporation sold only 14,000 tonnes of the 25,000 tonnes offered. Haryana saw the strongest response with the entire 10,000 tonnes offered being purchased. 

 

There is broad criticism over the government's open market sales operation of wheat this year. "There was no clear communication when auctions shifted from weekly to fortnightly and why they did so. Now again, there is no explanation for suspending auctions," the miller said. The government should "come clean" about the reasons behind the suspension. "They themselves seem clueless about OMSS (open market sales scheme) and when to start it. And they keep the market in doubt," the miller said.

 
Despite the uncertainty, the market broadly expects the government to resume wheat auctions sometime in January. For 2025-26, the government has allocated 3.0 million tonnes of wheat to be sold under the open market sales scheme, unchanged from last year. FCI sells wheat to liquidate excess inventory and stabilise prices in the open market.

In 2024-25, FCI started wheat auctions in December and sales were robust, with millers and processors bidding competitively to pick up more wheat from government godowns amid tight market supplies. According to market participants, liquidating stocks through open market sales is a necessity for the government as it is holding surplus food grain stocks. As of Nov. 1, wheat stocks with FCI were up 38% on year at 30.7 million tonnes, and rice stocks were over 13% higher on year at 33.6 million tonnes.  End

 

Edited by Tanima Banerjee

 

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