FCI to sell wheat in open mkt to non-procuring states in FY16

The government has decided to sell undisclosed quantity of FCI wheat in the open market throughout the year in 2015-16 fiscal to bulk consumers in non-wheat procuring states.

For last two years, state-run Food Corporation of India (FCI) had been selling wheat in the open market after end of the procurement season in June to bulk buyers in the non-wheat procuring states, like Karnataka and Tamil Nadu.

“The sale of wheat under the open market sale scheme will be continued after March 31, 2015 only in non-wheat procuring states,” said a circular issued by the Food Ministry.

Wheat procuring states are: Punjab, Haryana, Himachal Pradesh, Rajasthan, Madhya Pradesh, Bihar, Gujarat, Delhi, Maharashtra, Jammu and Kashmir, Uttar Pradesh, and Chandigarh.

The reserve price for sale of wheat in non-procuring states would be Rs 1,550 per quintal plus the freight and road transportation charges, if any, from ex-Ludhiana to the concerned depot of FCI, it said.

During the 2014-15 fiscal ending March, FCI sold old wheat stock at Rs 1,500 per quintal, while that of fresh stock at Rs 1,570 per quintal. However, an uniform rate has been kept for both old and new stock for the next fiscal.

This is being done to liquidate excess stock in FCI which currently holds about 19 million tonnes of wheat, as against the actual requirement of 7.5 million tonnes.

The stocks are expected to rise as FCI is aiming to procure 30 million tonnes of wheat from 2014-15 crop at the support price.

A senior Food Ministry official said the move will benefit non-wheat procuring states as it was found that they were facing difficult in buying directly from growing states during the peak procurement season.

In fact, the government had decided not to sell wheat in the open market during peak procurement season to non- procuring states to encourage them to directly buy the grain from the growing states like Punjab and Haryana, he added.

In the 2014-15 fiscal, the FCI sold around 4.5 million tonnes of wheat, against the target of 10 million tonnes.

While in the previous year, it had sold 6.1 million tonnes.

Wheat production in India, the world’s second biggest producer, is expected to decline marginally in the current 2014-15 crop year (July-June) from the previous record of 95.85 million tonnes achieved in 2013-14.