According to the chairman of the Food Corporation of India (FCI), the government body that buys grains from farmers at the minimum support price, 42% of the wheat the government sold in the open market through its first tender last week was purchased by flour mills that create atta and maida. Wheat processors anticipate that domestic wheat prices, which dropped by more than 6% last week on the FCI’s statement that it would sell the grain on the open market, will continue to fall as wheat begins to flow from the FCI warehouses. The FCI had previously declared on January 25 that it will sell 30 million tonnes of wheat under the open market sales scheme (OMSS) in order to lower wheat prices on the open market.
According to a January 25 article from ET, FCI’s procurement operations may be impacted if farmers decide not to sell to FCI due to the open market’s record wheat prices. FCI Chairman Ashok KK Meena told ET that 9.26 lakh tonnes of the 22 lakh tonnes of wheat that were offered in the company’s first tender, which was released last week, had received successful bids from purchasers. A hot wave in India reduced production during the 2022 rabi season, leading to wheat scarcity in the country. There isn’t enough wheat left over after exports and private purchases, according to dealers.
“We anticipate the lifting of the wheat to start the following week. We anticipate a further market cooling with each tender we issue in the upcoming weeks “Meena spoke. Wheat prices have been steady at those levels after falling precipitously the week prior to hearing about OMSS. The pipeline is dry in most locations since FCI’s wheat has not yet reached the markets.
“Since the previous week, West Bengal’s wheat prices had stayed steady at about Rs 28/kg. In the upcoming weeks, we anticipate a decline in prices “said West Bengali wheat processor Rohit Khaitan. “There will be a gradual increase in the pressure of the wheat from the approaching harvest, along with FCI wheat.” Due to the increased cost of transporting wheat from the growing centers, prices of wheat in eastern India are often higher than in the northern regions.