Govt to release more wheat in open market to check prices

The government today decided to release five million tonnes of wheat in the open market and retain zero duty on sugar and wheat imports in the wake of soaring food prices.

The empowered group of ministers (EGOM), headed by Finance Minister Pranab Mukherjee, decided to offload wheat under the Open Market Sale Scheme (OMSS) at prices lower than the market price.

Wheat will be sold from the government godowns between July and March at Rs 12.54 per kg against retail price of around Rs 14 a kg in Delhi.

As on June 12, the annual food inflation touched 16.90 per cent. The government has been under attack from the Opposition parties for soaring prices.

Despite a sharp fall in sugar prices to Rs 32-34 a kg from nearly Rs 50 a kg five months ago, the ministers' panel did not want to take a chance and retained the zero-duty regime for the import of the refined sugar.

The EGoM felt although sugar prices have dropped in the last few months, they are still high as compared to last year's, sources said. Even for wheat, the same view prevailed in the meeting, sources said.     

The government has been selling wheat in the open market since October 2009. As much as 1.2 million tonnes of wheat has been lifted as of now out of two million tonne allocated for the open market operation.

India imported 1.58 lakh tonnes of wheat last year and 2 lakh tonnes during April-May this fiscal. The country imported 6 million tonnes of sugar since February, 2009.