Live Markets »News & Advice»Economy News»Economy News Details
Economy News Details
Back

Govt to release extra wheat, rice to tame prices in festival season

BS Reporter/New Delhi 11 Nov 12 | 12:09 AM

To quell rising prices of wheat and rice during the ongoing festival season, the government has cleared sale of an additional 6.5 million tonnes (mt) of wheat in the open markets to bulk consumers and 1 mt of both wheat and rice to retail buyers.

In total, the government has till now allocated more than 10 mt of wheat and some quantities of rice in the open market during this financial year. In June, it had allocated 3 mt of wheat for only bulk consumers.

Related Stories

    No Related Stories Found

These allocations are above the normal allocation it makes to states every year for distribution at cheap rates through the public distribution system (PDS).

ON A HIGH
Retail price of wheat flour in some centres (in Rs /kg)
Cities 1-Oct 9-Nov

Change

Bhagalpur 17 21 4
Puducherry 22 25 3
Dindigul 24 28 4
Shimla 20 22 2
Retail price of common grade rice in some centres (in Rs/kg)
Cities 1-Oct 9-Nov

Change

Nagpur 28 30 2
Jodhpur 32 34 2
Trivandrum 30 33 3
Puducherry 28 29 1
Note: All centres have not been included     Source: Department of Consumer Affairs

According to a statement released on Saturday, the cabinet committee of economic affairs in a recent meeting approved sale of 6.5 mt of wheat to bulk consumers like flour millers and biscuit makers and 500,000 tonnes each of wheat and rice to National Agricultural Cooperative Marketing Federation of India (NAFED), National Cooperative Consumers' Federation of India (NCCF) and Kendriya Bhandar for sale to retail consumers.

“The sale of wheat and rice to retail use will increase the availability of these commodities in the market and will have moderating influence on prices of wheat and rice in the open market," the statement added.

 To bulk consumers, the wheat will be sold in small tranches of 2.5 million tonnes in every month till the end of this financial year.

The government has been accused of hoarding unsual quantities of wheat and rice in its stocks causing an artificial shortage in the retail markets leading to spurt in prices.

A senior official said the step will also help in easing the bulging grain stocks as procurement of rice picks up. In the last one month, the average retail price of wheat flour has risen by Rs 2-3 per kg to around Rs 21 per kg because of low supplies from flour mill owners. Rice prices have risen by Rs 1-2 per kilogram.

India harvested a bumper wheat crop of 93.9 mt in the 2011-12 crop year (July-June) with government procurement hitting a record 38.1 mt.

The stocks of wheat in the central pool stood at 40.58 mt at the end of October 2012 against a requirement of around 21 mt.

Market players said the government might sell the wheat at Rs 1,285 plus taxes (in wheat-growing states) and Rs 1,285 plus transportation costs in non-wheat producing states for bulk consumers.

Sensex

Company Price Gain (%)
Maruti Suzuki2,587.002.48
Bharti Airtel379.551.87
Hind. Unilever693.851.22
ICICI Bank1,476.400.23
Hero Motocorp2,598.900.11

Poll

Will Nifty July futures end above 7,800?


Online Portfolio

You can create Online Portfolio here using the below button.