The Centre will sell 30 lakh tonnes of wheat in the open market from its buffer stock to check rise in prices of wheat and wheat flour (atta), sources said.
Last week, food secretary Sanjeev Chopra had said that prices of wheat and atta have increased in the retail market and the government was exploring all options to control the rates. According to sources, the food ministry has decided to offload 30 lakh tonnes of wheat under the Open Market Sale Scheme (OMSS) in order to rein in prices.
Wheat stocks will be sold to flour millers and traders among others through tenders. Cooperatives Nafed and Kendriya Bahandar will also get wheat under the scheme.
According to the government data, the average prices of wheat across major cities stood at Rs 33.43 per kilogram on Wednesday, up from Rs 28.24 per kg a year-ago.
Average prices of atta (wheat flour) stood at Rs 37.95 per kg as on Wednesday as against Rs 31.41 per kg a year-ago.
State-owned Food Corporation of India (FCI), the government's nodal agency for procurement and distribution of foodgrains, had around 171.70 lakh tonnes of wheat as on January 1 in the buffer stock.
Under the OMSS policy, the government allows FCI to sell food grains, especially wheat and rice, at pre-determined prices in the open market from time to time to bulk consumers and private traders.
The purpose is to boost the supply during the lean season and moderate the general open market prices. Flour millers have been demanding from the government to offload wheat stocks from the FCI.
"We are finding that there is an uptick in the prices of wheat and atta. We are aware of the issue. Various options are being explored by the government and very soon we will come up with our response," Chopra had told reporters last week. The secretary had said that the stocks of wheat and rice in the FCI godowns are comfortable.
The Centre had banned wheat exports in May to control prices, after a slight fall in the domestic production and a sharp decline in the FCI's procurement for the central pool.
India's wheat production fell to 106.84 million tonnes in the 2021-22 crop year (July-June) from 109.59 million tonnes in the previous year due to heat waves in a few growing states.
The procurement fell sharply to 19 million tonnes this year from around 43 million tonnes last year. The area under coverage for wheat crop in the current rabi (winter-sown) season is slightly higher. The procurement of new wheat crop would commence from April 2023.
Sources said that the government will consider lifting the ban on wheat exports after harvesting of new crop.