The Food Corporation of India will offer 1.99 lakh tonnes of wheat at its weekly auction on 4 November. That is double the 1.01 lakh tonnes offered on 28 October, according to state-wise tender notices floated on 30 and 31 October1. Traders are barred from bidding, and the maximum quantity a single bidder can buy each week is unchanged1. So the extra tonnage may not reach each mill in proportion.
The last round sold almost everything: 99,316 tonnes, or 98.3% of the quantity offered, with several states taking their full allocation1. A week earlier, the government had cut the offer to 1.01 lakh tonnes from 1.07 lakh tonnes, a move millers in Assam, Karnataka and Telangana questioned4, 2.
What the 4 November tender changes
Allocations rise across the board1. Punjab gets 44,000 tonnes, up from 25,000, and Haryana 23,000 from 12,000. Uttar Pradesh gets 14,000 tonnes against 8,000, and Madhya Pradesh 10,000 against 6,0001. Assam, Delhi and Karnataka get 12,000 tonnes each, against 5,000 each. Gujarat gets 8,000 tonnes from 4,500, Rajasthan 8,000 from 4,000, and Tamil Nadu with Puducherry 10,200 from 4,0001.
For Karnataka, the increase is progress but not enough. The state's roller flour mills had asked for 15,000 tonnes a week and got 6,000 tonnes on 21 October, about 17% of members' estimated weekly need of 34,600 tonnes2. The 4 November allocation of 12,000 tonnes is below both the ask and the need1, 2.
Nationally, the industry has asked for 3 lakh tonnes a week. It says that would release about 60 lakh tonnes over 20 weeks, against about 30 lakh tonnes last year2. The doubled offer of 1.99 lakh tonnes still falls short1, 2. Punjab's millers had asked for 40,000 tonnes a week. They also want the 500 tonne weekly cap at each depot restructured, said Naresh Ghai, president of the Roller Flour Mills Association of Punjab3, 4. Punjab will get 44,000 tonnes on 4 November, though the per-bidder limit is unchanged1.
The cap, not the floor
Ashish Garg, president of the Delhi-based MSME Welfare Association, wrote to Food Minister Pralhad Joshi on 30 October. He asked for a review of reserve prices, lot sizes, quantity restrictions and other sale conditions1. He said FCI had sold OMSS wheat at prices 20% to 30% above market rates because of differences in sale conditions. He also sought stronger bidder verification and penalties for fraudulent bidders1. BusinessLine's report on the new notices confirms the per-bidder limit is unchanged. It does not report any change to the reserve price, which Garg wants reviewed1.
The auction results reported for 28 October do not show a premium of that size in every state. In Punjab, the average selling price was ₹2,992 a quintal against an all-India average wholesale price of ₹2,910. Only six of 203 bidders quoted below ₹2,9003. In many other states, bids went above ₹3,100 a quintal3.
Demand is outrunning small lots. Average selling prices rose week on week in most states except Haryana, even after the quantity on offer was cut3. Between the 14 and 21 October auctions, winning prices in Madhya Pradesh, Rajasthan and Haryana rose 6% to 8%2.
The limit that appears to bind is the volume each buyer can take. An industry expert told BusinessLine that a typical flour mill needs at least 3,000 tonnes a month to run its plant. With a cap of 300 tonnes, the expert said, "the government is not providing even half of their monthly requirement"3.
The shortage is in the open market, not in FCI's warehouses. FCI held 479.92 lakh tonnes of wheat on 1 September, the highest for that date in five years4. It held over 463 lakh tonnes on 1 October, against an October 1 buffer norm of 205.2 lakh tonnes3. The government procured 357.57 lakh tonnes this season, against 299.75 lakh tonnes a year earlier, and millers say mandi arrivals have dried up4, 3.
"It seems there is not as much wheat in the market as was earlier thought," Dharmendra Jain, president of the Roller Flour Millers' Federation of India, told BusinessLine. Millers therefore wanted to buy as much as they could from the government auction, he said4.
The prices buyers will pay
Mill-delivered wheat in Bengaluru rose 3.6% to 6.3% between 16 and 23 October2. Madhya Pradesh origin wheat rose from ₹3,200 to ₹3,400 a quintal, and Rajasthan origin from ₹3,400 to ₹3,6002. Those prices are well above the wheat MSP of ₹2,610 a quintal for the 2027-28 season, raised from ₹2,5855.
For atta and maida buyers, that mill-gate price is the input that matters. The mills' association cited Diwali on 8 November in asking for more wheat2. BusinessLine reported that experts doubt the doubling will cool prices while the per-bidder limit stays1.
The next checkpoint is the 4 November auction itself. If it clears below the 28 October levels, the extra volume is working. If it clears higher, the shortage is deeper than the extra tonnes can cover.
The forward signal: sowing and November rain
Wheat sowing covered 11,000 hectares as of 23 October, against 27,000 hectares a year earlier6. The main sowing window opens in the first week of November and runs for about two months7. Acreage may fall because of drought in Maharashtra and Karnataka, a senior official said7. ML Jat, director general of the Indian Council of Agricultural Research, expects no significant decrease because the main wheat states are fully irrigated5.
The India Meteorological Department expects normal to above normal rain in November in parts of central and north-west India8. That includes Madhya Pradesh, adjoining parts of Maharashtra and Gujarat, east Uttar Pradesh and Bihar8. West Uttar Pradesh, Haryana and Punjab are likely to get below normal rain, but those areas are almost fully irrigated8. Rajasthan and much of Gujarat, where irrigation is not assured, may also end with below normal rain8. Overall November rainfall is likely to be less than 77% of the long-period average of 29.7 mm, Director-General M Mohapatra said8.