Indian Wheat: FCI’s First Wheat Open Market Sale
Strong Demand for Indian Wheat in First E-Auction
The Food Corporation of India (FCI) received an overwhelming response during the first round of its weekly e-auction under the Open Market Sales Scheme (OMSS). Out of the 0.1 Million tonnes of Indian wheat offered, 98,700 tonnes were successfully purchased by 1,501 bidders. The high participation underscores the eagerness of millers to secure wheat stocks amid rising market prices.Price-Driven Demand for Wheat
The auction revealed that millers and processors were highly motivated to bid, primarily due to high prices in the open market. According to a flour miller from a southern state, “Millers are cautious about holding stock when prices are rising. This is why such heavy participation occurred in the first round of the auction. We expect even more interest as auctions continue weekly.”The government offered Indian wheat at a reserve price based on the minimum support price (MSP) of 0,28 USD per kg for fair and average quality (FAQ) wheat and 0,28 USD per kg for relaxed specifications (URS). Prices varied across states due to the inclusion of transport costs and mandi taxes.
State-Wise Performance in Indian Wheat Auctions
Out of the 23 states and regions participating in the e-auction, 16 reported 100% offtake, while five recorded sales between 95% and 99%. For instance, Tamil Nadu saw an 86% offtake, whereas the North-East region achieved 60% offtake.In addition, 11 top-consuming states accounted for 75,5% of the total 0.1 Million tonnes offered. These states sold 74,900 tonnes, highlighting the strong preference for competitively priced Indian wheat supplied by the government.
Highest Prices Achieved for Indian Wheat
The highest prices recorded during the auction varied across states. For example, Assam saw the highest bid at 0,39 USD per kg. Other notable prices included:- Jammu and Kashmir: 0,38 USD per kg
- West Bengal: 0,38 USD per kg
- Punjab: 0,38 USD per kg
- Odisha: 0,37 USD per kg
New Norms for Indian Wheat Auctions
This year, the government introduced stricter norms for OMSS auctions to ensure fair distribution of Indian wheat stocks. For instance, bidders must declare their monthly processing capacity and submit an undertaking stating they do not hold wheat stock beyond their declared capacity. Additionally, they are prohibited from bidding for or lifting stock exceeding this limit. These rules aim to prevent hoarding and promote equitable access to Indian wheat supplies.Future Supply Plans
On November 27, the Food Ministry approved the release of 2,5 million tonnes of Indian wheat under the OMSS by March 31, 2025. Stocks will be made available to flour mills, wheat product manufacturers, processors, and end users through weekly e-auctions. Key allocations for upcoming auctions include:- Uttar Pradesh: 14,000 tonnes
- Punjab: 12,500 tonnes
- West Bengal: 7,000 tonnes
- Assam: 6,500 tonnes
- Delhi: 5,500 tonnes
- Madhya Pradesh: 4,000 tonnes
- Jharkhand and Tamil Nadu: 3,000 tonnes each
Conclusion
The strong response to the first OMSS e-auction underscores the high demand for Indian wheat at government-set prices. With new norms in place and additional auctions planned, the scheme is expected to stabilize market rates while ensuring fair distribution among processors and millers.Click here to reach our trading platfrom CMBroker
