Govt to reduce Bharat Atta price by ₹2/kg in festive sop

The government plans to offload a quarter of a million tonnes of wheat into the country’s vast food distribution system and offer cut-price whole wheat flour made from it in the run-up to the last festival season of its term.

Under the plan, the Centre will slash the price of its Bharat Atta brand to ₹27.50 per kg from the existing ₹29.50 a kg, a senior government official said. This comes against the backdrop of the all-India average wheat flour price rising 4.1% this year to ₹35.84 per kg.

“The Centre will offload 250,000 tonnes of wheat to Kendriya Bhandar, National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers Federation of India Ltd (NCCF) from its central pool and the semi-government and cooperative organizations will convert it to atta or wheat flour and then sell it to consumers through various retail outlets at ₹27.50 a kg,” the official said.

“This is one among the many initiatives for the government to keep prices in check. This is being done to send a signal to the market that if the trade does not behave in the right manner, the government is here to intervene and use its tools,” the official added.

Wheat will be offloaded at ₹21.50 a kg as usual, and the margins of these agencies will be capped at ₹5 per kg grinding to flour and packaging.

Typically, converting wheat into atta costs around ₹1.80 a kg for big millers with a monthly milling capacity of 2,500-3,000 tonnes, and ₹2.50 per kg for small millers.

The Union government in February this year announced a scheme to offload 300,000 tonnes of wheat from the Food Corporation of India (FCI) to Kendriya Bhandar, NAFED and NCCF and sell flour as Bharat Atta at ₹29.50 per kg to check inflation.

The plan comes ahead of the general elections due by March next year.

The government has been offloading wheat under the open market sales scheme (OMSS) since 28 June. So far, it has sold about 3 million tonnes (mt) of wheat to bulk buyers like flour millers and small traders.

It initially decided to sell 1.5 mt of wheat which later was increased to 5 mt. In the last week of October, it increased the permit to lift the total quantity offered to processors to 300 tonnes from 200 tonnes to increase the availability of wheat in the open market and to stabilize the price of the grain.

As of 1 November, FCI had 21.8 million tonnes of wheat in its buffer stock as against 13.8 mt on 1 January, as per the agency sources.

Queries sent to the consumer affairs, food and public distribution ministry remained unanswered at press time.

The Union food secretary earlier said that these measures would not only improve the availability in the market but also help control food inflation.

Retail inflation in wheat eased to 7.9% in September from 9.3% in August this year and 17.4% in September 2022.

To boost production, the government last month announced a 7% increase in the minimum support price (MSP) of wheat, to ₹2,275/quintal for the 2024-25 marketing season (April-June) compared with the previous year. In April 2019, India raised the import duty on wheat to 40% from 30% to discourage cheap wheat imports.

In September, the government reduced the stock holding limit for wheat for traders, wholesalers and retailers to 2,000 tonnes from 3,000 tonnes. In the past few months, the Union government has announced a series of measures to check price rise, including a ban on white rice exports, initiating open market sale of wheat, and rice from the central pool, and the imposition of stock holding limits, a measure last initiated in 2008.