Despite being the second largest wheat producer in the world, India contributes a meager 1% in the global wheat trade owing to its high domestic needs.
The consumption of wheat in India is high as it is the staple food of the country, thus a bare portion of the total harvest is left for export purposes.
The requirement for Indian wheat was heightened during the Russian invasion of Ukraine but the domestic harvest of wheat was less due to unusual rounds of heatwaves in the wheat-producing states of the country and this forced the GOI to ban exports of wheat and wheat flour in May 2022. The GOI’s decision was necessary to prioritize the domestic demand and calm rising wheat prices in the national markets.
But the wheat prices continued to rise, pinching the pockets of the common people. Thus, to lessen public suffering, the GOI has released the wheat holdings in the internal market in a bid to calm down the selling prices. The Food Corporation of India (FCI) conducted an e-auction for the very first time to release wheat stocks in the domestic market.
Sale Of Wheat Through FCI’s e-auction
On February 1, 2023, FCI offered 22 lakh metric tonnes of wheat in the e-auction for the first time. The FCI’s e-auction was off to a strong start as more than 1100 bidders enrolled to purchase wheat in bulk quantities. Around 9.26 lakh metric tonnes of Indian wheat was sold on the first day of the e-auction itself.
Alterations In Wheat Prices
Last week wheat prices were 6% down as per the statistics. Wheat processors stated that the price of wheat will decline further after the announcement of FCI regarding selling wheat under the Open Market Sale Scheme.
On 25th January, FCI declared that the authority will release 30 million tonnes of wheat for sale in the open market so that the prices cool down.
Due to heat waves, India is experiencing a shortage of wheat harvest in the 2022 rabi season. Wheat traders also said that the export and private buying do not possess a surplus amount of wheat for Government procurement.
The FCI’s Chairman, Mr. Ashok KK Meena also stated that the wheat prices would cool down in the future with every tender that would be issued by FCI in the coming year.
“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 pricing, “said West Bengal’s wheat processor Mr. Rohit Khaitan. “There will be a steady increase in the pressure of the wheat from the approaching harvest, along with FCI wheat.”
Due to the increased cost of conveying wheat from the agricultural centers, prices of wheat in eastern India are often higher than in the northern regions.
According to millers, bidding for wheat is usually 50–70 rupees per quintal higher than the specified rate. Some dealers alleged that the wheat quality given by FCI is substandard. FCI has presented wheat from the 2021–22 procurement in the majority of regions. The “first-in, first-out” rule is always in effect, according to FCI’s chairman.
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