NEW DELHI: As the temperatures have risen abnormally in wheat-producing areas, so have the government’s anxieties over wheat prices and production. The government appears to be firefighting in its attempt to reduce the wheat and atta prices and reduce the impact of excessive heat on the current rabi crop by constituting a committee to advise farmers.
The government on Thursday claimed that the wholesale wheat prices have come down after offloading significant amount of wheat stock in the open market scheme. Meanwhile, the Central government has also decided to offload an additional 20 lakh tonnes (LT) of wheat to further reduce the prices.
Ashok K K Meena, the chairman and managing director Food Corporation of India (FCI), said after offloading more than 18 LT of wheat in the open market in three e-auctions since February, the wholesale price of wheat is reduced by around Rs 300.
However, the reduced wholesale price will take some time to offer solace to retail consumers. According to the Department of Consumer Affairs, the average retail prices in January 2023 of wheat and atta were at a 10-year high. Wheat prices were over Rs 3,300 per quintal while atta prices were over Rs 3,700 per quintal. The Ministry of Statistics and Programme Implementation data shows that since September 2021, the retail price index has shown over 20 per cent rise in wheat price.
Concerned over rising prices, the government on January 25 agreed to augment the wheat supply in the open market by offloading through the open market sale scheme (OMSS) to cool down the prices. Initially, the government decided to offload 25 LT wheat through OMSS. On February 21, it added 20 LT wheat to the market. Besides, the government provided 5 LT at a lower price to state governments, and its agencies like NAFED, Kendriya Bhandaran, and others, sell wheat at lower prices through different schemes. In all, the total wheat stock to be offloaded under the scheme is 50 LT.
The first e-auction sold 9.13 LT with an average price of Rs 2,474/quintal, followed by the second e-auction sold 3.85 LT with an average price of Rs 2,338/quintal. In the third e-auction, another 5.07 LT wheat was sold at an average price of Rs 2,172/quintal the reduced auction price need to be passed on to retail consumers. “Millers and traders assured us that reduced wheat price benefits will be passed on to consumers,” said Meena.
The government’s agricultural commodity price index also shows a minimal decrease in the modal price. “With this, model prices in different mandis of the country are hovering around Rs 2,200 to Rs 2,300,” said Meena. Meanwhile, the government has rejected traders’ and experts’ speculation of the possibility of hoardings that buyers will not release cheaper wheat as the current climatic condition may reduce wheat production like it did last year.
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The current climatic conditions causing excess heat during the flowering and maturing period lead to a loss in yield, possibly pushing the price in upcoming months. Only after that, the traders will release wheat in the market. “As of now, our assessment says the production will not come down. Moreover, we are promoting mostly small traders to participate in e-auction,” said Meena. He shared figures that show around 87 per cent are small traders who bought less than 500 metric tonnes and have a lesser chance to hoard.