India’s FCI sells 507,000t of wheat at third e-auction

State-owned Food Corporation of India (FCI) sold 507,000t of wheat through its third e-auction for the year on 22 February through the government’s open market sale scheme.

The sales were less than half the 1.18mn t FCI offered through a tender on 17 February.

FCI sold wheat at an all India weighted-average price of 2,172.08 rupees/quintal (Rs21.72/kg) compared with the all India weighted-average reserve price of Rs21.38/kg, the ministry of consumer affairs said on 23 February.

As much as 139,000t of the sales came from Haryana, Punjab and Madhya Pradesh states, the ministry said. The weighted-average selling prices for supplies from these three states was Rs21.48/kg compared with the weighted-average reserve price of Rs21.35/kg.

All the volumes on offer from the states of Delhi, Haryana, Tamil Nadu and Telangana were sold, the ministry said. It did not provide a breakdown of the volumes sold or on offer from each state.

Demand was highest for quantities ranging from 100-499t, followed by 50-100t, the ministry said. As many as 1,269 bidders participated in the auction but only six bids were received for the maximum quantity of 3,000t.

FCI said in January that it planned to offer 3mn t of wheat for auction through the open market scheme. The agency planned to offload this volume of wheat within two months to reduce rising prices of wheat. The Indian government on 21 February decided to release an additional 2mn t of wheat for auction through the scheme.

Global wheat prices surged after the Russia-Ukraine conflict began in February last year. The Indian government banned wheat exports in May last year to ensure sufficient supplies for the domestic market.

FCI had sold 920,000t of wheat at a weighted-average price of Rs24.74/kg at its first auction that began 1 February and 385,000t at Rs23.38/kg through the second auction two weeks later. The falling trend in auction prices suggests that the average wheat market has eased to below Rs22/kg, the ministry said on 23 February. The next e-auction will be done on 1 March.

The government has set the minimum support price for wheat at Rs2,015/quintal (Rs20.15/kg) for the 2022-23 rabi marketing season, up from Rs19.75/kg during the previous season.

FCI operates around 2,000 depots throughout the country, including 500 it owns. Food grain storage capacity at its depots has increased from 600,000t in 1965 to 80mn t currently.

Tags: wheat, India, sales, FCI, Food Corporation of India