Govt to start open market sale of wheat and rice from August 1

 The food ministry has asked the Food Corporation of India (FCI) to start offloading wheat and rice at a price excluding transportation at Rs 2325/quintal and Rs 2800/quintal respectively from August 1.

The government has approved the sale of wheat and rice from buffer stocks to bulk buyers starting next month to enhance domestic supplies and prevent price hikes of these staple cereals. 

The Food Corporation of India (FCI) has been instructed by the food Ministry to begin offloading wheat and rice at Rs 2325/quintal and Rs 2800/quintal, respectively, from August 1. The wheat price is set below the current market rate of Rs 2400/quintal. The specific quantity to be offloaded will be determined by FCI in consultation with the Ministry, ensuring sufficient stock for the public distribution system (PDS), buffer norms, and an additional 2 million tonnes (MT).

Last year, FCI started open market sales in June, offloading a record 10 MT for bulk buyers in FY24. This helped keep wheat inflation at 6.53% in May, maintaining single-digit inflation since August 2023. Currently, FCI holds 28.04 MT of wheat, surpassing the July 1 buffer requirement of 27.58 MT. After fulfilling PDS and welfare schemes, which require approximately 18.4 MT, there will be enough wheat stock for market interventions as needed.

For rice, the government has a surplus of over 47.49 MT against a buffer of 13.54 MT for July 1. Efforts to offload rice through weekly e-auctions have not received significant trade interest. Officials suggest measures are needed to reduce rice stocks, including supplying to states before the new paddy procurement season starts on October 1.

According to Sanjeev Chopra, Secretary, Department of Food and Public Distribution, in June the government imposed stock holding limits on wheat for retailers, wholesalers, processors, and big-chain retailers until 31st March 2025, to enhance supplies despite no reported shortage. He also stated that the wheat export ban imposed in May 2022 will not be lifted. 

The Agriculture Ministry estimates wheat output in the 2023-24 crop year (July-June) at 112.92 MT.