Clearing Stock
FCI sells only 48% of 250,000 tn rice offered in open market scheme last week
This story was originally published at 14:22 IST on 25 February 2025
Register to read our real-time news.Informist, Tuesday, Feb. 25, 2025
By Afra Abubacker
NEW DELHI – The Food Corp. of India sold 121,000 tonnes or 48.4% of the 250,000 tonnes of rice offered last week. Since August, Food Corp. has sold only 1.53 million tonnes out of the 4.08 million tonnes of rice offered under open market sales scheme. The government's nodal agency has been selling rice twice a week, on Thursday and Friday, to clear its swelling stocks.
As on Feb. 1, the stock of rice at Food Corp.'s godowns was 34 million tonnes, the highest for a month in 12 years. The stock is much higher than the required buffer of 7.6 million tonnes, that is, operational stock of 5.6 million tonnes and strategic reserve of 2.0 million tonnes.
However, sales by Food Corp. continue to be poor due to arrival of the new crop across the country. Rice prices at auction conducted by Food Corp. have fallen due to tepid demand for the grain. The average selling price has fallen to INR 2,863 per 100 kg from INR 3,167.3 per 100 kg since the start of the auctions in August, data showed.
Traders do not expect Food Corp. to clear a substantial portion of its stock until the government reduces the reserve price to INR 2,500 per 100 kg from INR 2,800 in the open market sales scheme. To encourage offtake, the government has even cut the reserve price of rice for sale to ethanol distilleries across India to INR 2,250 per 100 kg from INR 2,800 per 100 kg. Rice is among the many food commodities used to produce ethanol.
Amid piling stocks and storage constraints, the government has been encouraging sale of rice to clear stocks and make room for rabi procurement. End
Edited by Ashish Shirke
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