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HomePosts Tagged "Food Corporation of India"
Agribusiness, AgroPolicy, E-commerce, India, Trade

To moderate wheat price in open market, Centre to e-auction under Open Market Sales Scheme (Domestic) [OMSS (D)] 2024

In order to control open market wheat prices, the Center has chosen to auction it off under the Open Market Sales Scheme (Domestic) [OMSS (D)]. For wheat of fair and average quality, the government has set the reserve price at Rs 2325/quintal; for wheat with relaxed specifications, the price is Rs 2300/quintal. These prices will be available for sale to private parties through an electronic auction until March 31, 2025. To control the price, the Center has determined that the Food Corporation of India (FCI) will sell 25 lakh metric tonnes (LMT) of wheat on the open market under OMSS (D) to flour mills, wheat product manufacturers, processors, and end users via an online auction. The average price of wheat on the retail market is currently between Rs 3,000 and Rs 4,000. The minimum wheat support price, however, is Rs 2425. According to the government, wheat production will reach a record 1132,92 LMT in 2023–2024, which is 27–38 LMT more than the previous year.

Nonetheless, wheat production is estimated by the market to be relatively low. The production of wheat is approximately 1050 LMT, according to associations of roller and flour millers. Wheat production in the nation has stagnated due to weather fluctuations over the last two years and geopolitical tensions between Russia and Ukraine, the two biggest producers and exporters of wheat. For the last two years, the price of wheat has been skyrocketing. The government offloaded about 101,5 LMT of wheat under OMSS (D) last year as well.

To moderate wheat price in open market,

AgroPolicy, Foodgrains, India, Supply Chain, Warehousing

Paddy procurement in KMS 2024-25 has so far benefitted 6.58 lakh farmers in Punjab with an MSP value of Rs 27995 crore.

A total quantity of 126.67 LMT of paddy has arrived in the Punjab mandis as of 8th November 2024, out of which 120.67 LMT has been procured by State agencies and Food Corporation of India (FCI). The paddy is being purchased at MSP @ Rs 2320/- per Quintal as decided by Government of India for Grade ‘A’ paddy and the total paddy purchased by Government till date in the ongoing KMS 2024-25, amounts to Rs 27995 crore benefitting around 6.58 lakh farmers, in Punjab. Further, 4839 millers have applied for shelling of paddy and 4743 Millers have already been allotted work by Punjab State Government.

The Procurement of Paddy for KMS 2024-25 has commenced in Punjab from 1st October 2024 and 2927 designated mandis and temporary yards are operational throughout the State for smooth procurement from the farmers of Punjab. Central Government has fixed an estimated target of 185 LMT for Paddy Procurement for the ongoing KMS 2024-25 which shall continue up to 30.11.2024.

The paddy lifting from the mandis is in full swing and the paddy lifted is more than the daily arrival quantity. As such paddy procurement is going on smoothly.

Paddy procurement in KMS 2024-25 has so

AgroPolicy, Finance, India, Schemes - Govt

The infusion of Equity is a significant step towards enhancing the operational capabilities of FCI in fulfilling its mandate effectively.

The Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister Narendra Modi, has approved infusion of equity of Rs 10,700 crore for working capital in financial year 2024-25 in Food Corporation of India (FCI).  The decision is aimed at bolstering the agricultural sector and ensuring the welfare of farmers nationwide. This strategic move shows the Government’s steadfast commitment to supporting farmers and fortifying India’s agrarian economy.

FCI started its journey in 1964 with authorised capital of Rs. 100 Crores and equity of Rs. 4 Crores.  The operations of FCI increased manifolds resulting in increase of authorised capital from Rs. 11,000 crores to Rs. 21,000 crores in February, 2023.  The equity of FCI was Rs. 4,496 Crores in Financial Year 2019-20 which increased to Rs. 10,157 Crores in the Financial Year 2023-24.  Now, Government of India has approved significant amount of equity of Rs. 10,700 Crores for FCI which will strengthen it financially and will give a big boost to the initiatives taken for its transformation. 

FCI plays a pivotal role in ensuring food security by procurement of food grains at Minimum Support Price (MSP), maintenance of strategic food grain stocks, distribution of food grains for welfare measure and stabilization of food grain prices in the market.

The infusion of Equity is a significant step towards enhancing the operational capabilities of FCI in fulfilling its mandate effectively. FCI resorts to short term borrowings to match the gap of fund requirement. This infusion will help to lower the interest burden and will ultimately reduce the subsidy of Government of India.

The Government’s dual commitment to MSP-based procurement and investment in FCI’s operational capabilities signifies a collaborative effort towards empowering farmers, fortifying the agricultural sector, and ensuring food security for the nation.

The infusion of Equity is a significant

AgroPolicy, India, Supply Chain, Warehousing

These silo projects, built on a Design, Build, Finance, Operate & Transfer (DBFOT) basis, have been developed with private investment and are now fully operational.

As a part of 100 days achievements of Department of Food and Public Distribution under Ministry of Consumer Affairs, Food and Public Distribution, the Food Corporation of India (FCI) has successfully developed several state-of-the-art silo projects under the Public-Private Partnership (PPP) model. These projects mark a significant step in modernizing India’s food grain supply chain, ensuring efficient and sustainable storage and movement of essential commodities.

The latest addition to FCI’s infrastructure includes six operational silos strategically located in different regions of the country. These silo projects, built on a Design, Build, Finance, Own & Operate (DBFOO) or Design, Build, Finance, Operate & Transfer (DBFOT) basis, have been developed with private investment and are now fully operational.

Key Highlights of the Silo Projects:

Darbhanga Silo Project (Bihar):

Developed under the DBFOO model by M/s Adani Agri Logistics (Darbhanga) Ltd., this project includes a 50,000 MT storage capacity and a dedicated railway siding. It was completed in Commissioned in April 2024 and is now fully operational.

Samastipur Silo Project (Bihar):

Similar to the Darbhanga project, this silo in Samastipur was developed by M/s Adani Agri Logistics (Samastipur) Ltd. with a 50,000 MT capacity. Completed in May 2024, the facility is now operational.

Sahnewal Silo Project (Punjab):

Developed under the DBFOT model by M/s Leap Agri Logistics (Ludhiana) Pvt. Ltd., this project features a 50,000 MT capacity and supports local farmers by improving grain procurement and storage efficiency in Punjab. The project was completed in May 2024.

Baroda Silo Project (Gujarat):

With a 50,000 MT storage capacity, the Baroda Silo was completed in May 2024 by M/s Leap Agri Logistics (Baroda) Pvt. Ltd. and is operational, enhancing grain storage capabilities in the region.

Chheheratta Silo Project (Punjab):

Located in Amritsar, this facility was developed by M/s NCML Chhehretta Pvt. Ltd. with a 50,000 MT storage capacity. Completed in May 2024, it now provides essential storage for grains procured from farmers in the region.

Batala Silo Project (Punjab):

Located in Gurdaspur, the Batala Silo project, developed by M/s NCML Batala Pvt. Ltd., was completed in June 2024. With a 50,000 MT capacity, it further enhances FCI’s storage infrastructure in the region, benefiting numerous local farmers.

These silos will significantly enhance the Food Corporation of India (FCI)’s ability to ensure food security in several critical ways:

  • Enhanced Storage Capacity
  • Better Preservation
  • Reduced Losses
  • Efficient Handling and Bulk Storage
  • Automated Systems
  • Enables better quality control of stored grains.
  • Built with integrated rail and road transportation links,
  • Facilities designed for mechanized bulk loading and unloading
  • Lower Operating Costs

These silo projects and transportation initiatives are part of FCI’s broader efforts to ensure food security and reduce losses by improving storage and transportation infrastructure. The silos are equipped with modern technology, ensuring better preservation of grains, reducing losses, and supporting farmers by providing improved procurement facilities.

These silo projects, built on a Design,

AgroPolicy, Finance, India, Schemes - Govt

With this infusion of capital, FCI shall also embark upon modernising its storage facilities, improving transportation networks, and adopting advanced technologies.

In a landmark decision aimed at bolstering the agricultural sector and ensuring the welfare of farmers nationwide, the Government of India has announced an increase in the authorized capital of the Food Corporation of India (FCI) from Rs 10,000 Crore to Rs 21,000 Crore. This strategic move shows the government’s steadfast commitment to supporting farmers and fortifying India’s agrarian economy.

FCI, as the pillar of India’s food security architecture, plays a pivotal role in various crucial functions, including the procurement of food grains at Minimum Support Price (MSP), maintenance of strategic food grain stocks, distribution to state governments and Union Territories (UTs), and stabilization of food grain prices in the market.

The increase in authorized capital is a significant step towards enhancing the operational capabilities of FCI in fulfilling its mandate effectively. To match the gap of fund requirement FCI resorts to Cash Credit, Short Term Loan, Ways & Means etc. Increase of Authorised capital and further infusion will reduce the interest burden, reducing the economic cost and ultimately affecting the subsidy of GOI positively. With this infusion of capital, FCI shall also embark upon modernizing its storage facilities, improving transportation networks, and adopting advanced technologies. These measures are essential not only for reducing post-harvest losses but also for ensuring efficient distribution of food grains to consumers.

GoI provides equity to FCI for working capital requirement and for creation of capital assets. FCI is undertaking a comprehensive initiative to create an Integrated IT system, leveraging existing internal systems (FAP, HRMS) and external systems (State procurement portals, CWC/SWC). The E-office implementation has already made FCI a less paper organization. These initiatives of integrated IT solutions serving as the core operational software for FCI, shall provide a single source of information and streamline functions with a common digital backbone.

As a part of enhancing its efficiency, FCI is diligently executing tasks such as cement roads, roof maintenance, illumination, and weighbridge upgrades, enhancing food security. Purchase of lab equipment and the development of a software platforms for QC labs aim to improve quality checking. Studies on “Out-Turn Ratio”, “Shelf-Life”, and “Pest Management for Fortified Rice” complement FCI’s commitment to building an efficient and food security management system. The integration of automated digital equipment further aligns with FCI’s objectives, aiming to remove human intervention for a transparent procurement mechanism and enhance infrastructure for employees, saving on rent and creating assets for FCI.

With this infusion of capital, FCI shall

AgroPolicy, Foodgrains, India, Trade

Bidders allowed to bid for any quantity of rice from 1 to 2000 MT during e-auctions.

In order to increase the availability of wheat and rice in the open market to ameliorate inflationary trends in wheat and rice prices, Food Corporation of India, as per the directions of Govt. of India is offloading wheat and rice in the market through weekly e-auctions. Current phase of offloading of wheat in the open market started from 28.06.2023.

Wheat

Government of India has allocated 101.5 LMT wheat for offloading under OMSS (D). Reserve price for the FAQ wheat and URS wheat has been kept as Rs. 2150/ Qtl and Rs. 2125/Qtl respectively. Till 14.12.23, total 25 e-auctions have been conducted wherein 48.12 LMT wheat has been sold in the open market.

In addition to the above, Govt. of India is also providing wheat to the Semi-government/Cooperative agencies like NAFED/NCCF/Kendriya Bhandar/MSCMFL at Rs. 21.50/Kg for converting into atta and selling to general public at an MRP not exceeding Rs. 27.50/Kg. Till 14.12.23, 86084 MT wheat has been lifted by these agencies.

Rice

Good procurement and stock of rice with FCI will be utilized to cater to the PDS requirement as well as for market intervention. For rice, GOI allocated 25 LMT under OMSS (D) with a reserve price of Rs. 3100/Qtl. Through e-auctions, rice is offered at Rs. 2900/Qtl, with a Rs. 200/Qtl differential cost covered by the Price Stabilization Fund.

Remarkably, 1.19 LMT of rice has been sold in the open market to private traders and bulk buyers as of 14.12.23, a substantial increase compared to previous years. FCI Regional Offices actively promoted this initiative through extensive advertising.

Regular advertisement is being done to ensure that benefits of the OMSS (D) policy can be availed by the general public. All traders and any business person involved in Rice trading and processing can participate for such e-auctions after registering with FCI/m- junction portal.

However, to encourage greater participation, bidders are now allowed to bid for any quantity of rice from 1 to 2000 MT. The rice offered under the Central pool is of excellent quality, and traders are invited to actively engage in e-auctions to ensure easy and affordable availability for consumers in the market.

Bidders allowed to bid for any quantity

AgroPolicy, Foodgrains, India

A quantity of 1.16 LMT wheat from 361 depots and 1.46 LMT rice from 178 depots were offered from across the country

The Food Corporation of India (FCI) organised the 5th e-auction of 2023-24 to sell wheat and rice.  The e-auction sold 1.06 LMT of wheat and 100 MT of rice.

In order to control the retail price of rice, wheat and atta, weekly e-auctions are being organised. The government of India is committed towards price stabilisation and its market intervention is aimed at providing relief to the consumers.

A quantity of 1.16 LMT wheat from 361 depots and 1.46 LMT rice from 178 depots were offered from across the country.

The weighted average selling price was Rs. 2182.68/qtl for FAQ wheat against the reserve price of Rs. 2150/qtl Pan India whereas the weighted average selling price of URS wheat was Rs. 2173.85/qtl against the reserve price of Rs. 2125/qtl.

The average selling price was Rs. 3151.10/qtl for rice against the reserve price of Rs. 3151.10/qtl Pan India.

In the current tranche of e-auctions, the reduction in retail price is being targeted by offering up to 100 tonnes maximum for a buyer for wheat and 1000 tonnes for rice. This decision encourages small and marginal end users and ensures that more participants could come forward and bid for the quantity from their depot of choice.

A quantity of 1.16 LMT wheat from

AgroPolicy, E-commerce, Foodgrains, India, Trade, Warehousing

FSSAI License made mandatory for participation to identify genuine processors and traders.

Chairman and Managing Director, Food Corporation of India, Ashok K. K. Meena said that the Government has now directed the FCI to conduct the e-auctions of wheat and rice to check the inflationary trends in prevailing retail prices as a part of market intervention to control the price of wheat and rice. Meena said this while addressing the media in New Delhi.

The base price of wheat has been kept at the same level at Rs 2150/qtl for FAQ and Rs 2125/qtl for URS wheat. In order to control the hoarding of wheat, the Government has decided that the declaration in the Wheat Stock Monitoring System portal is mandatory for participation in the auctions. In addition to this, in order to identify the genuine processors and traders, the valid FSSAI License has also been made mandatory for participation.

The maximum quantity that a buyer can bid for is limited to 100 MTs in this e-auction. To accommodate the small wheat processors and traders, the minimum quantity has been kept to 10 MTs. Further, to accommodate the small and marginal traders and processors of wheat, the EMD for participation in the e-auctions has also been reduced by 50 per cent from the earlier levels.

The bidding is also limited to the local buyers by ensuring that the GST registration of the State is mapped and checked before stocks are released. These measures are taken to ensure a wider local reach for the stocks offered in a particular State.

4 LMT of wheat is being offered in the 1st e-auction from 457 depots across the country. 271 fresh empanelment of buyers were done after 01.04.2023. There are 2093 active empanelled bidders as on date. The e-auction for rice under Open Market Sale Scheme (Domestic) would commence from 5th July 2023. The base price of Rice is Rs 3100/qtl.

6 weekly e-auctions of wheat were conducted by FCI till 15.03.2023. Total quantity of 33.7 LMT wheat was offloaded, and the prices of Wheat came down by 19% due to this massive intervention in a span of 45 days. Due to the Rabi Procurement period of Wheat, the market intervention was suspended. 

FSSAI License made mandatory for participation to

AgroPolicy, Foodgrains, India, People, Supply Chain, Sustainability

Besides, the flour mills were advised to bring down the prices of atta and other products in line with the reduction in market prices of wheat.

Food Corporation of India (FCI) may offload an additional quantity of 20 LMT of wheat in the open market under the Open Market Sale Scheme (OMSS) 2023 for sale through e-auction to flour mills, private traders, bulk buyers and manufacturers of wheat products like previous years. So far 50 LMT of wheat have been decided to offload under OMSS 

The reduction in reserve price along with the additional offloading of 20 LMT of wheat will collectively help in reducing the market price of wheat and wheat products for consumers.

Secretary, DFPD held a Video Conference meeting with the FCI and the representatives of flour millers, associations, federations, atta and suji product manufacturers to review the lifting of stocks in the second auction conducted under OMSS 2023.

Besides, the flour mills were advised to bring down the prices of atta and other products in line with the reduction in market prices of wheat.

Besides, the flour mills were advised to

Acts & Schemes – Centre, India, Schemes - Govt

1150 bidders participated in the e auction

In order to address the rising price of wheat and Atta in the country, as per the recommendation made by the Committee of Ministers, Food Corporation of India (FCI) offered 22.0 LMT out of 25 LMT Wheat stock earmarked for e auction wheat from the Central pool stock to the market through various routes under the Open Market Sale Scheme (Domestic) in the e. auction. In the e auction more than 1150 bidders came forward for participation in the first week and a quantity of 9.2 LMT was sold across the country.

Further, sale of wheat through e. auction will continue throughout the country on every Wednesday till 2nd week of March 2023.

In the first week of e auction quantities ranging from of 100 to 499 MT had maximum demand followed by quantities of 500-1000 MT followed by 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 at one go.

Weighted average rate of Rs 2474/Qtl was realised by FCI in the auction. Rs 2290Cr was generated by FCI in the e auction conducted in the first week of February.

From the 3 LMT wheat allocated to Govt. PSUs/cooperatives/Federations like Kendriya Bhandar, NCCF and NAFED for sale without e-auction at the concessional rate of Rs 2350/Qtls for converting wheat to Atta and offer it to public at a Maximum Retail Price of Rs 29.50 per Kg. NCCF is allocated 50000 MT of Wheat across 07 states. Allotment of 1 LMT Wheat is made to NAFED and 1 LMT Wheat made to Kendriya Bhandar under this scheme to bring down the price of Atta across the country. Kendriya Bhandar has launched the scheme for selling Atta under the said scheme. NAFED is set to start the scheme across 8 states.

The e auction has already left an impact of fall in market prices of wheat by more than 10 percent in the past one week. The prices are set to fall further after the wheat sold in the e auction is lifted and aata is made available in the market.

1150 bidders participated in the e auctionIn