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Informist, Thursday, Oct. 24, 2024

 

By Afra Abubacker and Pallavi Singhal

 

NEW DELHI – A total of 385,500 tonnes of rice, or 39% of the sales target for the financial year 2024-25 (Apr-Mar), has been sold by the Food Corp. of India under the open market sales scheme through auctions as of Wednesday, according to a government official. Rice auctions, conducted weekly, began in the first week of August and are likely to continue till the end of FY25 with the agency aiming to offload 1 million tonnes of the grain, the official added.

 

According to the official, as many as 11 auctions have been conducted so far, with an average offtake of 40,000 tonnes. The Centre had auctioned rice last year as well, offering it at INR 29 per kg. However, as per the official, the FCI was able to sell only about 187,000 tonnes in all of FY24. "We are now selling rice at a reserve price of INR 28 per kg. However, the total may come to around INR 30-31 per kg depending on the transportation costs," the official said. 

 

FCI has been offloading rice in the domestic market as state granaries remain full. Having banned rice exports in July last year, New Delhi is sitting on nearly 20-year-high rice stocks in government godowns. As of Oct. 1, the government's rice stocks were at 31.1 million tonnes, the highest level since 2005 and 40% higher on year.

 

The storage crunch has left little room for paddy procurement, irking farmers in Punjab. During Oct. 1-15, the government bought 2.07 million tonnes of rice, down 48% from 3.94 million tonnes during the same period a year ago, according to media reports.

 

Apart from the surplus rice stocks pressuring the government to ease trade policies, increased paddy acreage has boosted the prospects of ample availability of rice in the domestic market. Paddy acreage this season has risen 2.2% on year to 41.4 million hectares.

 

For the kharif marketing year 2024-25 (Oct-Sept), the government has set a rice procurement target of 48.5 million tonnes. During 2023-24, the government procured 52.54 million tonnes of rice, against the target of 52.13 million tonnes.

 

Besides resuming open market sales, the government has undertaken several other steps to make room for the upcoming procurement operations. On Wednesday, it lifted all restrictions on exports of rice, barring the ban on broken rice shipments. Now, basmati rice, non-basmati white rice, as well as parboiled rice can be exported free of any barriers like export duties or minimum export prices.

 

In August, the Centre allowed states to directly buy rice from FCI without having to participate in the electronic auctions. In June 2023, the Centre had discontinued the sale of wheat and rice under the open market sales scheme to states to ensure adequate stocks with itself.

 

To reduce the all-time-high rice stocks, the government also recently allowed FCI to sell rice to distilleries to produce ethanol, capping the quantity at 230,000 tonnes. In July 2023, the government had also suspended the supply of surplus rice from FCI to distilleries to make ethanol.  End

 

Edited by Rajeev Pai

 

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