In an ongoing effort to regulate and stabilize retail prices of essential commodities like rice, wheat, and atta, the Government of India has undertaken a proactive initiative through weekly e-auctions. The 26th e-auction, held on December 20, 2023, marked significant innovations aimed at optimizing the sale of wheat and rice while curbing stockpiling and ensuring fair market distribution.
During the recent e-auction, a substantial quantity of 4 Lakh Metric Tonnes (LMT) of wheat and 1.93 LMT of rice was put up for sale. Notably, 3.46 LMT of wheat and 13,164 Metric Tonnes (MT) of rice were successfully sold. The weighted average prices stood at Rs 2178.24 per quintal for wheat and Rs. 2905.40 per quintal for rice, illustrating a strategic balance in price control and market equilibrium.
A notable and strategic alteration in the e-auction framework, implemented from the auction dated December 20, 2023, involves the limitation on wheat purchases based on the type of electricity connection. Bidders with Low Tension (LT) electricity connections are now allowed to bid for only 50 MT of wheat, while those with High Tension (HT) connections can bid for up to 250 MT of wheat. This measure aims to prevent stockpiling and ensure that wheat acquired through Open Market Sales Scheme (Domestic) (OMSS (D)) is promptly processed and released into the open market by the successful bidders.
Additionally, modifications in the bidding criteria for rice under OMSS (D) have been introduced. The minimum and maximum quantities a bidder can bid for rice have been set at 1 MT and 2000 MT, respectively, as of the December 20, 2023, e-auction. Bidders can bid in multiples of 1 MT, promoting increased participation and facilitating the sale of rice under OMSS (D). As a result of this strategic shift, the sale of rice surged significantly to 13,164 MT from the previous auction’s 3300 MT, showcasing the efficacy of these reforms in augmenting market participation and distribution.
These measures emphasize the government’s commitment to fostering transparency, fair trade practices, and equitable distribution of essential food commodities. By setting reasonable bidding limits and introducing criteria based on electricity connections, the government aims to streamline the distribution chain, prevent stockpiling, and ensure that these vital commodities reach consumers efficiently.
The latest developments in the e-auction mechanisms for wheat and rice under OMSS (D) signify a dynamic approach by the Government of India in addressing market challenges while fortifying efforts to control retail prices and maintain stability in the essential food market. These strategic interventions are pivotal in ensuring a balance between supply and demand, thereby benefiting both producers and consumers alike.