CCEA approves open market sale of 105 lakh tonnes of foodgrains to curb retail prices

The decision to release foodgrains in the open market will help in containing prices of wheat and rice, say experts. File photo: P.V. Sivakumar  

The Cabinet Committee on Economic Affairs (CCEA) on Friday approved a Food Ministry’s proposal to offload 105 lakh tonnes of foodgrains from Food Corporation of India stocks in the open market to contain retail prices.

This is the first offloading this fiscal under the Open Market Sale Scheme.

Wheat will be sold ex-Punjab and Haryana godowns to bulk consumers and traders at Rs. 1,500 per quintal plus freight. And 5,00,000 tonnes of rice will be given to States for retail consumers at Rs. 1875 per quintal plus freight.

Food Minister K.V. Thomas told journalists after the meeting that of the 100 lakh tonnes of wheat, 85 lakh tonnes would be sold to bulk consumers, 10 lakh tonnes would be offered from FCI godowns to small traders, 4 lakh tonnes would be allocated to States and one lakh tonnes would be offered to cooperatives at the same rate.

The CCEA did not take up another proposal of the Food Ministry for export of two million tonnes of wheat through public sector undertakings.

The decision to offload food grains in the open market is influenced as much from the necessity to clear the stocks as it is to contain retail wheat prices in the wake of private trade buying directly from farmers at higher than the minimum support price.

State agencies have procured about 250 lakh tonnes of wheat this season which is lower than the target of about 440 lakh tonnes, leading to the apprehension that wheat prices are set to rise in the open market.

The FCI has a stock of 490 lakh tonnes of wheat. With the offloading of 100 lakh tonnes, it will be left with 390 lakh tonnes which will be sufficient to meet the annual requirement under the Public Distribution System and buffer norms.

The total food grains stock is around 770 lakh tonnes.

Last year, 450 lakh tonnes of wheat was exported on government account. This is apart from export by private trade.

This article is closed for comments.
Please Email the Editor

Printable version | Nov 27, 2020 8:53:29 PM |

Next Story