Govt trims open market sale price of rice

livemint.com:

₹3,100 per quintal for rice under the so-called open market sale scheme domestic (OMSS-D), which did not find many takers given that it was priced above market rates. Buyers on Wednesday picked up only 1,500 tonnes, and a total of 495 tonnes in the previous five auctions, prompting government to cut the base price by ₹200 a quintal. The new reserve price will take effect from next week’s auction.

“Keeping in view the experience of the past five e-auctions for rice by FCI, it has been decided that the reserve price will be brought down by ₹200 a quintal and the effective price now will be ₹2900 per quintal," Union food and public distribution secretary Sanjeev Chopra told reporters. “The cost on account of reduction in the reserve price will be borne from the Price Stabilization Fund (PSF) maintained by the Department of Consumer Affairs," he added. FCI’s rice has about 25% broken grain and was costlier than the market price of ₹28-29 a kg, which made it unattractive for traders.

The government on Wednesday also decided that FCI will offload 5 million tonnes (mt) of wheat and 2.5 mt of rice in a phased manner under OMSS. This is in addition to previous plans to auction 1.5 mt wheat and 500,000 tonnes rice. FCI has so far sold 821,000 tonnes of wheat in seven e-auctions since 28 June.

Average bid price for wheat under OMSS on Wednesday was ₹2,254.71 a quintal against the reserve price of ₹2,129.17. In the case of rice, the average bid price was ₹3,163.53 per quintal against the reserve price of ₹3,162.03. The auctions aim to signal to the market that the government has sufficient has foodgrains stock, which will be used to bring down prices, the food secretary had said on 10 July.