The Food Corp. of India (FCI), in today’s e-auction, sold 1,500 tonne of rice compared with 193,00 tonne offered. It has sold a total of 495 tonne of the food grain against nearly 1.4 million tonne offered in the previous five e-auctions since 5 July.

“Keeping in view the experience of the past five e-auctions for rice by FCI, it has been decided that the reserve price will be brought down by ₹200 a quintal and the effective price now will be ₹2,900 per quintal,” food secretary Sanjeev Chopra said. “The cost on account of reduction in the reserve price will be borne from the Price Stabilization Fund (PSF) maintained by the Department of Consumer Affairs.”

Rice offered under OMSS comprises about 25% broken grain and was costlier than market rates of ₹28-29 a kg, including export cost (until exports of white rice were not restricted) which made it unattractive for traders. As a result, there were few takers for the food grain, according to trade experts.

The government has decided to offload 5 million tonne of wheat and 2.5 million tonne of rice in the open market through OMSS. This is over and above 1.5 million tonne of wheat and 500,000 tonne of rice sales announced under the OMSS on 28 June.

Since 28 June, the government has so far sold 821,000 tonne of wheat against 1.75 million tonne offered in seven e-auctions.

Average bid price for wheat under OMSS on Wednesday was ₹2,254.71 a quintal against the reserve price of ₹2,129.17. In the case of rice, the average bid price was ₹3,163.53 per quintal against the reserve price of ₹3,162.03.

The reserve price of wheat has been kept unchanged.

The Centre had allowed sales of grains, including rice, under the OMSS, as an indication of ample food grains stock in the central pool and its intent to use these stocks to bring down prices, the food secretary had said on 10 July.

Over the past year, wheat prices have risen 6.77% in the retail market and 7.37% in the wholesale market. Similarly, rice prices in the retail market have shot up by 10.63% and 11.12% in the wholesale market during the same period.

Retail inflation in rice in June jumped to 11.8% from 11.5% in May and 3.2% in June 2022. The staple grain has a weightage of 4.7% in the the food and beverages basket of the Consumer Price Index.

“In view of the benefit of over 140 crore citizens, the union government has taken this decision to offer wheat and rice under OMSS(D) to private parties for increasing availability, moderate the rise in market prices and control food inflation. However, it is relevant to mention that the government is also providing food grains to National Food Security Act beneficiaries as per their entitlement free of cost as committed under Pradhan Mantri Garib Kalyan Anna Yojna (PM-GKAY) w.e.f. 1st January 2023,” an official statement said.

As on 8 August, FCI had 24.6 million tonne of rice in central pool, including stocks in transit as against the buffer norm of 10.2 million tonne as on 1 October. It has nearly 28 million tonne of wheat against the buffer norm of 20.5 million tonne, sources said.

Updated: 09 Aug 2023, 06:15 PM IST