No takers for open market wheat

Two weeks after the Union food ministry made open market sale of 909,000 tonnes of wheat operational, the state governments have not lifted a single grain even though the festive season has set in. It is learnt that there are no buyers at the rates fixed by the ministry.

States such as Uttar Pradesh and Assam have  communicated that they do not plan to lift at these rates. The sale was planned keeping in mind the additional demand during the festive season when prices usually shoot up.

States are supposed to lift the wheat from Food Corporation of India (FCI) warehouses and distribute it to retail consumers (whose monthly consumption is 30 tonnes). Wheat has a weight of 1.38 per cent in the wholesale price index, which has been hovering over the 12 per cent mark for the past few weeks.

“As on date, there has been no lifting from any of the 35 states and union territories. Two states-UP and Assam-have communicated that they do not plan to lift the wheat. UP had been allocated 40,000 tonnes while an allocation of 30,000 tonnes was made for Assam,” said an FCI official.

Wheat is being offered in the price range of Rs 1,021 a quintal (for Punjab and Haryana) to Rs 1,358 a quintal (for Andaman and Nicobar Islands).

This price has been calculated by taking the cost of transportation from Ludhiana to a state capital plus the minimum support price (MSP) of Rs 1,000 a quintal. The buyer would also be required to incur a cost of upto Rs 100 a quintal towards handling and distribution.

In the wholesale market, wheat is currently selling at Rs 1,080-Rs 1,090 a quintal in Delhi and Rs 1,250-1,300 a quintal in the southern states. Wheat has also been selling at a price ranging between Rs 930-960 a quintal (ex-mandi) in major producing states of Punjab, Haryana and Uttar Pradesh, lower than the MSP of Rs 1,000 a quintal.

Driven by a handsome MSP, wheat output in the current year touched a record high of 78.4 million tonnes and government procurement also hit an all time high of 22.5 million tonnes. The central pool had a wheat stock of 23.2 million tonnes as on September 1.