Around 3.46 LMT wheat and 13164 MT rice were sold during 26th e-auction under OMSS

As a part of the government’s initiative for market intervention to control the retail price of rice, wheat and atta, 3.46 LMT wheat and 13164 MT rice were sold during 26th e-auction under Open Market Sale Scheme (OMSS) by the Food Corporation of India (FCI), the ministry of consumer affairs said in a statement.

“In the e-auction, 3.46 LMT wheat and 13164 MT rice was sold at a weighted average of Rs 2178.24/Qtl for wheat and Rs. 2905.40/Qtl for rice,” it said in a statement.

Cereal prices in November rose to 10.27% pushing the food inflation to 8.70% in November, against 6.61% reported the previous month. Food inflation accounts for nearly half of the overall consumer price basket. An increased acreage of wheat would help shore up government’s stocks, which are at a seven-year low, helping it in managing inflation as it gears up for the general elections in 2024.

An increased inflation forced the government to offload an extra amount wheat in the open market to millers and traders during its weekly auction conducted by the Food Corporation of India bringing down the all-India average selling price to Rs 2,172.94/quintal – the lowest since September 27.

Last month, S&P Global Commodity Insights said that the much expected El Nino weather event may adversely impact rainfall during the winter season 2023 thereby affecting the key rabi crop such as wheat. This could push inflation in cereals.

India, the largest exporter of rice, banned non-Basmati white rice exports in July 2023, while Basmati exports are now subject to $950/mt FOB minimum export price and parboiled rice attracts 20% export duty.Domestic prices of non-Basmati rice moderated slightly with export curbs in place and arrival of new crops, however, in the latest data, rice inflation has touched double digits, causing worry for the government.It recently modified its OMSS rules for rice, relaxing it a bit. “The minimum and maximum quantity of rice that a bidder can bid has been fixed to 1 MT and 2000 MT respectively w.e.f. e-auction dated 20.12.2023. The bidders can bid in multiples of 1 MT i.r.o. rice under OMSS (D),” said the ministry in the statement.

This step has been taken to enhance the sale of rice under OMSS (D) and in the present e-auction the sale of rice has increased to 13164 MT from 3300 MT that was sold in the previous e-auction.

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