Worried over rising wheat prices, Govt to sell 50 lakh tonnes in open market

https://www.thehindubusinessline.com/economy/agri-business/worried-over-rising-wheat-prices-govt-to-sell-50-lakh-tonnes-in-open-market/article67176955.ece

Worried over the ₹118/quintal surge in the selling price of wheat within a span of 43 days since the open market sale scheme (OMSS) auction commenced on June 28, the Union government took a couple of measures on Wednesday to control prices. It declared its intention to sell an additional 50 lakh tonnes (lt) of wheat, despite the fact that only about 4 lt had been sold in the past four rounds of the weekly e-auction. Announcing the decision, Food Secretary Sanjeev Chopra said the government would sell 50 lt of wheat and 25 lt of rice from the Central Pool in the open market to contain the price rise. Chopra said the reserve price of rice would be reduced by ₹2 per kg to ₹29 from the next round.

“There has been a sharp increase in prices of wheat and rice recently,” Chopra said. He said out of 15 lt of wheat allocated earlier, 8.21 lt have been sold between June 28 and August 9. Out of 5 lt of rice intended to be sold under the OMSS only 1,995 tonnes have been sold so far.

The average selling price of wheat on June 28 e-auction was ₹2,136.36 per quintal and increased to ₹2,254.71 on August 9 — up 5.5 per cent, data show. The weekly auction also show saw a steep decline in participation of bidders after the government barred traders from the bidding process. While 1,813 bidders were participated on July 12, only 1,226 participants recorded their presence on August 9.

‘Prices may rise’

A bidder, who had purchased wheat at ₹2,135/quintal a fortnight ago, had to pay ₹2,300 on Wednesday to buy 100 tonnes, said prices could further rise if the government did not take some concrete steps immediately.

“Traders are not allowed and maximum one bid can be submitted by one entity when there is a limit to by 100 tonnes maximum by one bidder in each round. With such guidelines, the trade very well knows that only about 1 lt could be sold in each round and about 30-25 lt more could be sold until March 31 next year,” said a flour miller. The posturing is not going to help control price rise of wheat when the need is to increase availability of the grain, the miller added.