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Government to sell five million tonnes of wheat, 2.5 million tonnes of rice in open market.
Aug 10, 2023

The government will sell 5 million tonnes of wheat and 2.5 mt of rice from its stocks in the open market, an official said on Wednesday, a move aimed at stabilising prices. This is in addition to the sale of 1.5 mt of wheat and 0.5 mt of rice announced a few months ago under the open market sale scheme (OMSS).

The domestic prices of these staples have been rising due to low supply. On Wednesday, the price of wheat surged to a six-month high.

"There has been a sharp increase in prices of wheat and rice recently," food secretary Sanjeev Chopra told reporters, adding that people have been hoarding wheat in anticipation of a price rise.

The country has adequate stocks of wheat and rice, which the government can release in the open market to stabilise prices, he said.

So far, about 0.7 mt of wheat has been sold through e-auction under the OMSS, while sale of rice has been negligible.

On August 1, the government's warehouses held approximately 28 mt of wheat and 24.3 mt of rice.

The average retail price of wheat declined from Rs.31.58 a kilogram in January this year to Rs.28.74 per kilogram in May but rallied again to Rs.29.59 a kilogram in July, the government told Parliament.

The average retail price of rice has risen to Rs.40.82 a kilogram in July from Rs.38.09 per kg in January.

Wholesale cumulative inflation in FY24 till the end of June was 7.6%, having added 10.7% in FY23.

A combination of low production, declining stocks and rising demand has fuelled the price rise.

The government pegged India's wheat production at a record 112.7 mt in 2023, but private estimates peg the harvest at 101-103 mt due to unseasonal rains.

economictimes.indiatimes.com

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