FCI may sell record 7 million tonnes of wheat to bulk buyers in FY16

State-owned Food Corporation of India (FCI) is likely to sell a record seven million tonnes of wheat to bulk consumers in the open market during the ongoing fiscal on strong demand.

From April 1, the FCI started offloading wheat under the open market sale scheme (OMSS) to liquidate surplus stocks. It fixed a reserve price of wheat at Rs 1,550 per quintal in Punjab, Haryana as well as Madhya Pradesh and with additional freight charges in other states.

In 2014-15 fiscal, the FCI sold 4.2 million tonnes of wheat as against the target of 10 million tonnes. While in the previous year, it had sold 6.4 million tonnes.

"FCI has so far sold over 1.4 million tonnes of wheat to bulk consumers under the OMSS. The demand for wheat has picked up and FCI may sell a record 7 million tonnes this fiscal," a senior Food Ministry official told PTI.

In April-September this year, FCI sold 4,00,000 tonnes of wheat, but in October wheat sales rose to over 9,00,000 tonnes on account of strong demand, the official said.

There is spurt in demand for FCI wheat because there is no private stock available in the market. Private players did not buy much of wheat in 2014-15 due to poor grain quality following unseasonal rains in some states, the official added.

That apart, further hike in import duty of wheat to 25 per cent has restricted cheaper imports.

FCI, the government's nodal agency for foodgrain procurement and distribution, procured 28.08 million tonnes of wheat from the 2014-15 crop. More than 80 per cent of wheat was procured based on relaxed quality norms.

As on June 1, FCI was holding a wheat stock of 40.35 million tonnes.

The country's wheat output declined to 90.86 million tonnes in 2014-15 crop year (July-June) from 91.50 million tonnes in the previous year due to unseasonal rains.