At 40 MT, FCI rice stocks five times buffer 

By Sandip Das

Just over a month and half into paddy procurement for 2023-24 season (October-September) by agencies, the rice stocks with the Food Corporation of India (FCI) have crossed 40 million tonne (MT) against the buffer requirement of 7.61 MT for January 1.

With the sluggish response to the government’s aim to sell rice in the open market through weekly e-auction, the corporation’s rice is expected to mount with harvesting in key producing states such as Chhattisgarh, Odisha, Telangana, Andhra Pradesh and eastern states to commence next month.

Currently FCI has 19.62 MT of rice, while 20.65 MT of grain is yet to be received from the millers.

Under the existing procurement system, after paddy is procured from the farmers by FCI and state agencies, it is handed over to millers for conversion into rice. Paddy to rice conversion ratio is 67%.

Under the Pradhan Mantri Garib Kalyan Anna Yojana (PMFBY) which is being currently implemented, the FCI annually supplies around 35 MT of rice to states for distribution free.

So far in the current procurement season (2023-24), the agencies so far have purchased 13.91 MT of rice equivalent of paddy from mostly Punjab, Haryana and Tamil Nadu. The government is aiming to procure 52.12 MT of rice in the current kharif season, which accounts for more than 85% of the total grain purchase.

“With procurement of paddy is expected to pick up pace across states in the next couple of months, our rice stocks are expected to rise further,” a food ministry official told FE.

The official said with the sluggish response to the open market sale of rice by FCI, the government has to take measures to reduce rice stock which would far exceed the requirement.

Since the commencement of e-auction in July, the corporation has sold only 0.1 MT of rice in the open market so far while the government had earmarked 2.5 MT of rice from the central pool to be offloaded in the open market to bulk buyers,

In August, FCI had cut the base prices of rice offered under open market sale scheme by Rs 2/kg to Rs 29/kg.

Average bid price for rice under OMSS earlier this week was Rs 2,911.79/quintal against the reserve price of Rs 2,910.62/quintal.

Retail rice prices rose by 11.9% in September, a marginally lower from the previous month. The government has banned exports of white rice and imposed 20% export duties on par-boiled rice to improve domestic supplies.

This article has been republished from The Financial Express.