Govt may not sell wheat at low rates

Flour millers, expecting wheat at subsidised rates from the Centre, could be disappointed as the government plans to charge actual costs, if at all it sells the grain in the open market.

According to sources, the Food Ministry has proposed before the Committee of Secretaries (CoS) that any sell of wheat to bulk consumers, if required to check prices in open market, should cover all expenses, including carriage cost.

The economic cost of wheat is about Rs 15.50 a kg while the minimum support price is Rs 10.80 a kg, they said.

In September 2008, the Centre had launched an Open Market Sales Scheme (OMSS) for bulk consumers like flour millers, offering wheat at minimum support price plus freight.

Nearly 1.4 million tonnes of wheat at Rs 10.23-13.81 a kg rate was sold to flour millers and other user industries while the states lifted about 69,000 tonnes under the OMSS.

The scheme was initially valid for two months but the government extended it till February-end in the wheat growing belt while in the non-growing states, the OMSS continued till March 31 to keep a check on domestic prices.

During the current marketing season, the government has procured maximum quantity from the mandis and the private sector has shown little interest in buying the grain.

“One of the reasons for low participation of private trade during current procurement season is the expectation of release of wheat under OMSS at subsidised prices like last year,” a senior government official said.

Wheat procurement has crossed 23 million tonnes so far in the 2009-10 marketing season, surpassing last year’s record 22.68 million tonnes. The government hopes to purchase about 24 million tonnes this year.