India: Why Government has offered wheat and rice for sale in open market, but at a higher price than last year

The central government has increased the reserve prices of wheat and rice to be offloaded to private traders from its strategic reserves by about 11 per cent and 3 per cent respectively over the last fiscal (2024-25). Reserve price is the minimum price at which the Food Corporation of India (FCI) – the statutory body that procures, stores, and distributes foodgrains through the Public Distribution System (PDS) – sells from the Central Pool under the Open Market Sale Scheme-Domestic (OMSS-D). The scheme is used by FCI to offer grains, mainly wheat and rice, in the open market by e-auction as a mechanism to ensure supply and control food inflation. Why is the increase in the reserve price of India’s main cereals important? The Department of Food and Public Distribution (DFPD) under the Ministry of Consumer Affairs, Food and Public Distribution, which has fixed the reserve prices of wheat and rice, has not announced what quantities of these grains will be sold in the open market. ...