Govt’s wheat stocks may fall below buffer by April
After the government’s move to sell more quantities of wheat in the open market to curb rise in prices, the stocks held with the Food Corporation of India (FCI) may fall below the buffer requirement by the beginning of next fiscal.
Official sources told FE that with an additional allocation of 2.5 million tonne (MT) besides 10 MT of wheat approved for calibrated release under the open market sale scheme (OMSS) in the current fiscal, the grain stock with FCI could fall below the buffer of 7.48 MT by April 1.
Since June, FCI has sold 4.46 MT of wheat from its stock in the current fiscal through weekly e-auctions and the weekly allocation of grain for e-auction has been increased to 0.4 MT from December 20.
“After selling 10 MT of wheat in the open market, we may use buffer stock for the purpose of curbing the possibility of rise in prices in coming months,” an official said.The arrival of new crops from April 1 assumes importance to boost the government’s wheat stock.
At present, wheat stock with FCI is 19.78 MT, lowest since 2016. Around 6 MT of the grain is required for supplies under the Pradhan Mantri Garib Kalyan Anna Yojana till end of the current fiscal.The government is aiming to sell another 5.6 MT of wheat this fiscal which may lead to the grain stock held with FCI precariously close to the buffer, an official said.
In addition, 69,000 tonne of wheat has been lifted by Kendriya Bhandar, farmers’ cooperatives Nafed and National Cooperative Consumers Federation (NCCF) from FCI at minimum support price (MSP) rate for converting into ‘Bharat Atta’ which is being sold to consumers at Rs 27.5/Kg. The food ministry last week enhanced allocation to 0.4 MT of grain to these agencies.
The government on Friday reduced stock holding limits for wheat for traders and wholesalers to 1000 tonne from 2000 tonne. The stock holding limits on wheat were imposed in June, 2023.“This has been done to prevent artificial scarcity and curb hoarding,” food secretary Sanjeev Chopra had stated.
“The Department of Food and Public Distribution is maintaining a close watch over the stock position of wheat to control prices and ensure easy availability in the country,” according to an official note.Meanwhile, the modal retail prices of wheat at per the department of consumer affairs on Saturday had declined to Rs 28/kg from Rs 30/kg prevailed three months back.
The food ministry has ruled out reducing import duty on wheat. In April 2019, India raised the duty to 40% from 30% as domestic prices had dropped, to discourage cheaper wheat imports.Retail inflation in wheat last month declined to 7.61% from 7.93% in September.
This article has been republished from The Financial Express.