FCI sells 750 mt tones of wheat through NSEL
16 Jun 2010
Mumbai: The National Spot Exchange today commenced the third round of auctions of Food Corporation of India's wheat stock under open market sales scheme (OMSS) from three depots in Delhi.
The auction, held between 10:00 am and 11:50 am, resulted in the sale of 750 MT of wheat. The highest bid received in auction was Rs1,260 per quintal and the lowest bid, which is also the floor price fixed by the government, was Rs1,254.08 per quintal.
In March 2010, NSEL signed an agreement with FCI for selling wheat under open market sales scheme in Delhi. The government releases excess stocks available after public distribution through an open market sales scheme to stabilise prices every year.
In Delhi markets, prices are around Rs1,245 per quintal, though the auction fetched a marginally higher price.
For carrying out sale of FCI's wheat, NSEL had launched a tailor-made e-auction contract for FCI. Under this contract, FCI is the single seller while buyers could be flour mills across the region, which have been empanelled with FCI. FCI quotes its floor price and the quantity and buyers have to bid for it through the NSEL platform.
Upon confirmation of trade, payment is made to the exchange on the designated days. The exchange transfer funds to FCI electronically and then, FCI issues delivery orders in favour of the buyers, who are required to take delivery from the designated warehouse.
