Strong purchase of government wheat

14-Dec-2024 11:57 AM

The Food Corporation of India (FCI) is currently holding weekly e-auctions for the sale of wheat under the Open Market Sale Scheme (OMSS), with strong interest from millers and processors.

So far, two weekly auctions have been held, each offering 1 lakh tonnes of wheat. In both auctions—on December 4 and December 11—almost all the wheat was sold. Specifically, 98,700 tonnes were sold in the first auction and 99,815 tonnes in the second. In the first auction, 1,501 processors participated, and in the second auction, 1,480 buyers were involved.

A notable trend is that in the country’s top 10 consuming states—Uttar Pradesh, Punjab, Haryana, Rajasthan, Bihar, Maharashtra, Gujarat, Delhi, Assam, and West Bengal—millers and processors have purchased 100% of the offered wheat.

Together, these states purchased over 70,000 tonnes in the first auction and 70,500 tonnes in the second. The enthusiasm for government wheat is also strong in southern India, though there is slightly less demand in a few northeastern regions.

The millers-processors had been eagerly awaiting government wheat, especially since the Food Ministry had announced the OMSS plan in July.

The plan was delayed for a few months due to a limited surplus of wheat in the central pool. However, it has now been decided to sell 25 lakh tonnes of wheat under OMSS by March 2025, with 1 lakh tonnes offered for sale every week.

The government wheat is available at a relatively lower price compared to market rates, which has led to significant purchases by processors.

This is particularly beneficial for companies that had been struggling with high wheat prices, as they were forced to raise the prices of their products.

The availability of government wheat at lower prices is expected to help stabilize product prices and provide relief to consumers.