Govt further reduces reserve price of wheat to tame prices

NEW DELHI: The government on Friday further reduced the reserve price for sale of wheat from the Food Corporation of India (FCI) stocks to Rs 2,150 per quintal for bulk buyers, such as flour millers, in a bid to check prices. FCI is offering wheat under the Open Market Sale Scheme (OMSS), a market intervention to check prices, by increasing availability.
The food ministry said the reserve price of fair and average quality (FAQ) wheat has been reduced to Rs 2,150 and that of Under Relaxed Specifications (URS) wheat to Rs 2,125 per quintal. This is barely Rs 25 more than the Minimum Support Price (MSP) announced for the winter wheat crop.
The ministry said rates will be applicable till March 31. State-run FCI had announced to offload 25 lakh tonnes of wheat to bulk users under the OMSS. So far it has auctioned around 13 lakh tonnes.
“Reduction in reserve price will help in reducing market price of wheat and wheat products for consumers,” the ministry said. States are allowed to purchase wheat from FCI for their own scheme at reserve prices without participating in e-auction, it added.
On February 10, the ministry had done away with freight charges and kept the reserve price of FCI wheat uniformly at Rs 2,350 per quintal to bulk users pan-India through e-auction.
Sources said the main reason behind reducing the reserve price was less sale of the wheat offered by FCI in the second round.
Though the government had expected sharp decline in prices of atta (wheat flour) after it first announced to offload 25 lakh tonnes on January 25, there has been minor correction. In Delhi, the retail prices of atta have fallen by only Rs 2 per kg at Rs 33.