Tag: Food Corporation of India

India to offload 50 lakh tonnes of wheat, 25 lakh tonnes of rice in open market to curb inflation

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Union Government is all set to offload 50 lakh metric tonnes (LMT) wheat and 25 LMT rice in the open market via OMSS (Open Market Sale Scheme) to curb rising prices of cereals in the retail market. The government has also reduced the reserve price of rice from Rs. 31/kg to Rs. 29/kg to increase availability for consumers.

Food Secretary Sanjeev Chopra said that despite the sale of both the cereals in the open market under OMSS in 2023-24, only 8 LMT wheat was liquidated in the 7 e-auctions conducted so far and only 1,900 tonnes of rice was taken up despite 15 LMT wheat and 5 LMT rice offered till now.

Noting a rise in average prices of wheat and rice, the Secretary said that rice’s offtake wasn’t up to the mark and the government hopes to reduce food inflation with these measures even as the reserve price for wheat remains unchanged.

While the announced measures will be reviewed periodically in an internal weekly review meeting every Wednesday, the Secretary assured that India has adequate stocks of wheat, rice and sugar.

The Food Secretary said that the decision may also lead to a fresh sale of cereals by some big farmers and hoarders who were waiting to dispose stocks in the market. FCI Chairman said that even after the fresh market intervention, the government will have an additional 87 LMT of wheat and 270 LMT of rice available apart from requirement for PDS and other schemes.

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India hopes for uptick in rice procurement, cool down in prices after tepid response in 1st e-auction

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Union Government is confident of attracting more bidders in future rounds of e-auction of rice under open market sale scheme (OMSS) despite a tepid response in the first e-auction held on July 5. The OMSS is aimed at cooling down rice prices by signalling the market about the availability of ample stocks with the government, stated Food Secretary Sanjeev Chopra. 

Chopra also pointed out that there has been an 11 percent rise in prices of rice since last year. 

The e-auction for rice conducted by the Food Corporation of India (FCI) had attracted bids only for 170 metric tonnes (MT) despite offering a total of 3.86 lakh metric tonnes (LMT) rice.

Additionally, last month, FCI had stopped sale of foodgrain to state governments, evoking a strong reaction from the Congress-led Karnataka state government which had sought 2.28 LMT foodgrains from the central government for free distribution to families living below the poverty line in the state.

Stating that a wrong narrative was being created regarding OMSS, the Food Secretary said the OMSS was being undertaken in the country’s larger interest and the government needed to keep surplus stocks in hand for possible market interventions in future. He also added that weather disturbances and El Nino may decrease rice procurement. 

Pointing to India’s total need for rice under Pradhan Mantri Garib Kalyan Yojana (PMGKY) at 360 LMT, he explained that an additional 5 kg allocation to each BPL (Below Poverty Line) beneficiary as sought by Karnataka would have required a total rice procurement of 720 LMT. The government wouldn’t have been able to meet the resultant shortfall as the total rice procurement is 560 LMT per year, Chopra stated.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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FCI will sell 4.29 lakh tonnes wheat, 3.95 lakh tonnes rice in third e-auction on July 12

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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State-owned Food Corporation of India (FCI) will sell 4.29 lakh tonnes of wheat and 3.95 lakh tonnes of rice from the buffer stock to bulk consumers in the third round of e-auction to be held on July 12.

The government is offloading wheat and rice from the FCI stock under the Open Market Sale Scheme (OMSS) to bulk consumers to improve the domestic supply and control the retail price of rice, wheat and atta.

In the third round of e-auction, the FCI will offer a quantity of 4.29 lakh tonnes of wheat from 482 depots and 3.95 lakh tonnes of rice from 254 depots from across the country, the food ministry said in a statement.

FCI has come out with tenders in this regard. Interested parties may empanel themselves for participation in future e-auctions, it said.

The FCI is encouraging more small and marginal end users to participate in the weekly e-auctions so that the stocks reach a wider section of the society, it added.

In the previous e-auction conducted on July 5, a total quantity of 1.29 lakh tonnes of wheat was sold to 1,337 bidders and 170 tonnes of rice to 5 bidders.

The weighted average selling price was Rs 2,154.49/quintal for FAQ (Fair and average quality) wheat against the reserve price of Rs 2,150/quintal pan-India whereas weighted average selling price of under relaxed specifications (URS) quality of wheat was Rs 2,132.40/quintal against the reserve price of Rs 2,125/quintal, the ministry said.

The weighted average selling price was Rs 3,175.35/quintal for rice against the reserve price of Rs 3,173/quintal pan-India.

The stock declaration by bidders in wheat stock management portal of the government of India is made mandatory for participation in the e-auction for wheat.

In the current tranche of e-auctions, the ministry said that the reduction in retail price is being targeted by offering up to 100 tonnes maximum for a buyer.

This decision is to encourage small and marginal end users and to ensure that more participants could come forward and bid for the quantity from their depot of choice, it added.

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FCI to again commence open market sale of wheat to curb prices, says the option of import duty cut is open

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Rising food grain prices in the retail market have prompted the government to again start open market sales of wheat and rice to cool rising prices.

Food Corporation of India (FCI)’s CMD Ashok Kumar Meena said that up to 15 LMT open market sale operations can be conducted as per the government’s current order as he cited food inflation beyond six percent as unacceptable as per RBI’s MPC’s minutes.

FCI is slated to commence the first round of e-auctions for 4 LMT wheat from 28th June and for 5 LMT rice from 5th July. Stating that 87 LMT wheat and 292 LMT rice are available for future interventions with the FCI beyond the buffer requirements laid down as per law, Meena indicated that all options remain open to curbing prices, including the possibility of an import duty cut.

While the base price of wheat has been kept at the previous level of Rs. 2,150 per quintal for FAQ and Rs. 2,125 per quintal for URS wheat, the base price of rice has been kept at Rs. 3,100 per quintal.

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A valid FSSAI licence and a declaration in the Wheat Stock Monitoring System portal have been mandated for participation in the auction in order to control the hoarding of wheat. The maximum quantity that a buyer can bid for is limited to 100 MT in this e-auction while the minimum quantity has been kept at 10 MT.

To accommodate the small and marginal traders and processors of wheat, the EMD for participation in the e-auctions has been reduced by 50 percent from the earlier levels.

The bidding has been limited to the local buyers by ensuring that the GST registration of the State is mapped and checked before stocks are released. FCI said that these measures are being taken to ensure a wider local reach for the stocks offered in a particular state.

Suspended due to the rabi procurement period, the government had earlier engaged in market intervention via six weekly e-auctions of wheat till 15th March, where FCI data revealed that 33.7 LMT wheat was offloaded, and retail prices came down by 19 percent within 45 days.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India to rollout quarterly open market sale for wheat after this year’s procurement cycle

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Government sources have told CNBC-TV18 that a quarterly open market sale (OMS) scheme is slated to commence for wheat after the completion of this year’s wheat procurement cycle. The scheme is likely to be rolled out in June or July this year, after wheat procurement is completed by the end of May 2023.

The quantity of wheat to be sold under OMS will depend on its availability and price, even as the government expects 100 lakh metric tonnes (LMT) wheat to be available for OMS on April 1, 2024, over and above NFSA (National Food Security Act) and buffer stock requirements. The move to aimed to check the hoarding of stocks and the resultant panic which leads to a rise in wheat prices. However, the ban on wheat exports is expected to continue for now.

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The latest OMS conducted by the Food Corporation of India (FCI) till March 2023 had witnessed the sale of 33 LMT wheat via e-auction, where over 31 LMT wheat was bought. Last week, the FCI assured that the wheat procurement for the Rabi Marketing Season (RMS) 2023-24 was progressing smoothly and better than last year, with 111 LMT wheat bought till April 19, 2023, compared to the purchase of 99 LMT on a corresponding day last year.

FCI had stated that over 11.89 lakh farmers have benefited so far from the wheat procurement operations with an expected MSP outflow of Rs. 23,663.63 crores. Earlier this month, Food Secretary Sanjeev Chopra had said that despite the loss of lustre in the wheat crop due to rains across India, the quantity wasn’t impacted and the government was confident of meeting the 342 LMT wheat procurement target in RMS 2023-24.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

FCI to sell 10.13 lakh tonnes of wheat to bulk users via e-auctions tomorrow

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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State-owned Food Corporation of India (FCI) plans to sell 10.13 lakh tonnes of wheat to bulk consumers in the sixth round of e-auction to be held on Wednesday as part of the government’s measures to check wheat and atta prices.

The Centre has announced the sale of 50 lakh tonnes of wheat in the open market to control prices. Of this, 45 lakh tonnes have been earmarked for bulk consumers, including flour millers.

Also Read: India to offload extra 20 lakh tonnes of wheat in open market to fight inflation

FCI has sold 28.85 lakh tonnes of wheat to bulk consumers in the five rounds of e-auction held so far. According to a senior government official, FCI will offer 10.13 lakh tonnes of wheat to bulk consumers in the sixth round of e-auction to be held on March 15.

FCI will offer wheat from its 620 depots.

In the last round, FCI sold 5.39 lakh tonnes of wheat to bulk consumers, including flour millers, under the Open Market Sale Scheme (OMSS).

The official said that the sale of wheat in open market has helped in reduction of wheat and atta prices in the country.

Also Read: India’s wheat needs top priority, export policy changes later: FCI Chief AK Meena

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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India’s wheat needs top priority, export policy changes later: FCI Chief AK Meena

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Chairman of the Food Corporation of India (FCI), A.K. Meena, on Thursday, February 23, said meeting India’s domestic needs is the top priority and there is no question of relaxing the wheat export policy until the procurement operations are completed, when asked about the government’s wheat procurement operations .

Meena also clarified that procurement operations usually take place in April and May, and there is no possibility of easing the wheat export policy until after these operations.

He revealed that 18 lakh metric tonnes (LMT) of wheat has already been sold by the FCI through the Open Market Sale Scheme (OMSS), out of which 11 LMT has been lifted by the buyers. 

He also expressed confidence in the upcoming wheat procurement season, stating that he expects good procurement to take place next year.

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The FCI has sold 18.05 LMT of wheat since February 1 under the OMSS. Meena said they will announce a tender for the fourth e-auction tomorrow to offer over 11 LMT of wheat to further improve availability.

Meena also revealed that the model mandi prices have gone down to Rs 2,200-2,300 per quintal and the OMSS has received a good response. The highest rate quoted in the wheat e-auction in Uttar Pradesh is now down to Rs 2,150 per quintal from Rs 2,900. However, he noted that the change in wholesale prices of wheat takes a few days to be reflected in the retail price.

During the e-auction, 80 bidders bought 500-1,000 MT wheat, while six bidders bought over 3,000 MT. Meena expressed optimism about the prospects for wheat procurement, as the area sown under wheat has increased across India.

However, he declined to speculate on the weather conditions and stated that internal estimates indicate normal wheat procurement this year of 300-400 LMT. He expects 113 LMT to be the closing balance of wheat stocks on April 1 — buffer stocks norms mandate 75 LMT.

In addition to wheat, the FCI has also procured over 700 LMT of rice, with contributions from 96 lakh farmers. Meena assured that there are enough stocks of rice in hand.

Also read: Wheat prices reduced by Rs 200 per quintal, to be effective till March 31

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

FCI grain scam: CBI raids 50 locations across Punjab

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Central Bureau of Investigation (CBI) on Tuesday, February 21, conducted raids at 50 locations in Punjab as part of its probe into allegations of corruption against Food Corporation of India (FCI) officials.

As part of Operation Kanak 2, CBI teams raided the premises of private rice millers, and grain merchants to break the nexus of channelised corruption in FCI.

The operation was spread across Rajpura, Sirhind, Patiala, Fatehgarh Sahib, Mohali, Moga, Firozpur, Ludhiana, Sangrur among others, they said.

This is the second round of searches in the FIR pertaining to an organised syndicate of officers at the FCI, who allegedly charged bribes of Rs 1,000-4,000 per truck unloaded at the FCI godowns from private millers per crop season for covering up lower-quality grains supplied by them, and other favours.

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According to the CBI, accused FCI officials received huge bribes during the process of procurement to accommodate the procurement of low-quality food grains.

The agency said malpractices of FCI officials were seen in day-to-day operations in the unloading of foodgrains and the accused conspired with rice millers to cover up shortages in stocks. Further, CBI said incriminating documents and digital devices were recovered during searches so far.

The agency has booked a total of 74 accused in the FIR, including FCI Executive Director Sudeep Singh, officials, rice mill owners, and middlemen, and so on, who were allegedly indulging in corrupt practices.

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The role of senior officers of the Punjab government is also under the scanner for running ‘benami’ warehouses outsourced to the FCI. Among the 74 accused, 34 are serving officials, three are retired, 17 are private individuals, among others.

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Centre reduces wheat prices offered to bulk users to check rates

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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With wheat prices still ruling high despite offloading of FCI stock in the market, the Centre on Friday decided to do away with freight charges and sell the grain at a reserve price of Rs 2,350 per quintal to bulk users pan India through e-auction.

Apart, the government has reduced the price of FCI wheat offered to institutions like Nafed, NCCF, and Kendriya Bhandar to Rs 21.50 per kg from Rs 23.50.

These institutions are being offered wheat for converting the grain into flour and selling it at a maximum retail price of Rs 29.50 per kg, but now they have been asked to sell at Rs 27.50 per kg. A decision in this regard was taken by the food ministry in consultation with its finance counterpart.

Last month, the government announced plans to sell 30 lakh tonne of wheat in the open market from its buffer stock under the Open Market Sale Scheme (OMSS) in order to check rising wheat and wheat flour prices.

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Out of the 30 lakh tonne, Food Corporation of India (FCI) will sell 25 lakh tonnes to bulk consumers like flour millers through e-auction, 2 lakh tonnes will be given to states/union territories and 3 lakh tonne to institutions and state-PSUs at concessional rates for converting wheat into wheat flour.

“After the announcement of OMSS Policy, the Government of India has observed that the market prices of wheat are still very high,” the food ministry said.

It has also been observed that due to the inclusion of freight charges in base prices for auction under OMSS, the auction rates in states which are away from Punjab, Haryana and Madhya Pradesh are very high, especially in the northeast, east, and southern regions, it said in a statement.

In order to reduce the price of wheat and wheat flour (atta), the ministry decided not to add “any transportation cost component”, which will help the supply of wheat to the general public in different parts of the country at a reasonable price.

The reserve price for the sale of wheat under OMSS will be Rs 2,350 per quintal pan India for fair and average quality, and Rs 2,300 per quintal for Under Relaxed Specifications (URS). The states are allowed to purchase wheat from FCI for their own schemes at above reserve prices without participating in e-auction.

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Further, the rate of wheat has been reduced to Rs 21.50/kg for institutions like Nafed, NCCF, Kendriya Bhandar, state cooperatives, etc as well as community kitchens and NGOs engaged in relief operations.

“This concessional rate for NCCF/NAFED/ Kendriya Bhandar/State government cooperatives/ Federations etc will be applicable with the stipulation that they will convert wheat to atta and offer it to the public at an MRP not exceeding Rs 27.50/Kg,” it added.

FCI has already sold 9.26 lakh tonnes of wheat out of 25 lakh tonnes to traders, flour mills, etc in the course of the first e-auction held during February 1-2. The next auction will be held on February 15.

FCI, the government’s nodal agency for procurement and distribution of foodgrains, had around 156.96 lakh tonnes of wheat as of January 26 in the buffer stock. On April 1, the country would have a wheat stock of 96 lakh tonnes, just above the buffer norm requirement of 75 lakh tonnes.

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Under the OMSS policy, the government allows FCI to sell food grains, especially wheat and rice, at predetermined prices in the open market from time to time to bulk consumers and private traders. The purpose is to boost the supply during the lean season and moderate the general open market prices.

The Centre had banned wheat exports in May last year to control prices, after a slight fall in domestic production and a sharp decline in the FCI’s procurement for the central pool.

India’s wheat production fell to 106.84 million tonnes in the 2021-22 crop year (July-June) from 109.59 million tonnes in the previous year due to heat waves in a few states.

The procurement fell sharply to 19 million tonnes this year from around 43 million tonnes last year. The area under coverage for wheat crops in the current rabi (winter-sown) season is slightly higher.  The procurement of new wheat crops would commence on March 15.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CBI cracks down on Food Corporation of India, conducts searches at 50 locations after arresting DGM

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Central Bureau of Investigation (CBI) on Wednesday launched a crackdown on alleged corruption in the Food Corporation of India, conducting searches at 50 locations in Punjab, Haryana and Delhi after arresting a deputy general manager-ranked officer, officials said. The CBI has recovered Rs 60 lakh in search operations, so far.

The role of officials from technical assistants to executive directors in the FCI are under the agency’s scanner, they said.

The searches were started after the arrest of a deputy general manager (DGM) in the FCI while taking a bribe of Rs 50,000, they said.

They said the operation is spread across multiple cities in Punjab, Haryana and two locations in Delhi.

The sources said the agency has started the operation against an “unholy nexus of corruption” in the FCI involving a chain of officers, rice mill owners, grain merchants etc, engaged in the procurement, storage and distribution of food grains, they said.

The CBI was developing intelligence for the last six months following many complaints received by it, they said.

The role of state government employees will also be under the scanner, they said.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow