Food Corporation Of India’s E-Auction A Success: 9.2 LMT Wheat Sold In 2 Days.

The Food Corporation of India (FCI) conducted an e-auction of 22.0 LMT out of 25 LMT Wheat stock on 1st and 2nd February 2023 in order to address the rising price of wheat and atta in the country. The recommendation was made by the Committee of Ministers. In the first week of the e-auction, more than 1150 bidders participated and a quantity of 9.2 LMT was sold. The sale will continue throughout the country every Wednesday till the 2nd week of March 2023.

The first week of the e-auction showed a high demand for quantities ranging from 100 to 499 MT followed by 500-1000 MT and then 50-100 MT, indicating that small and medium flour millers and traders actively participated in the auction. Only 27 bids were received for the maximum quantity of 3000 MT. The weighted average rate of Rs. 2474/Qtl was realized by FCI, generating a total of Rs. 2290Cr.

The government allocated 3 LMT of wheat to PSUs/cooperatives/Federations such as Kendriya Bhandar, NCCF, and NAFED for sale without e-auction at a concessional rate of Rs 2350/Qtls to convert wheat to atta and offer it to the public at a Maximum Retail Price of Rs. 29.50 per Kg. NCCF was allocated 50000 MT of wheat across 07 states, 1 LMT to NAFED, and 1 LMT to Kendriya Bhandar. Both Kendriya Bhandar and NAFED have launched or are set to launch the scheme for selling atta at a lower price.

The e-auction has already had an impact on the market, causing a fall in wheat prices by more than 10% in the past week. The prices are expected to continue to fall further as the wheat sold in the e-auction is lifted and atta is made available in the market.