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Informist, Monday, Sept. 8, 2025

--Official: FCI rice open mkt sales fall Thu as demand weak ahead of new crop

--Official: Will tweak open mkt sales strategy if rice sales remain weak

--Official: Sold 15,000 tn rice in open mkt out of 128,000 tn offered Thu

 

By Afra Abubacker

 

NEW DELHI – The Food Corp. of India's rice sales under the open market sale scheme in 2025-26 (Apr-Mar) fell sharply on Thursday, as easy availability of the grain at lower rates in local markets and expectations of new crop arrivals from October dampened demand.

 

On Thursday, FCI offered 128,000 tonnes of rice, but sold only 15,000 tonnes. "We were expecting 25,000-26,000 tonnes sales. But bidders' participation was low," an FCI official said.

 

"Since the start of the auction in August, this is the first time sales dropped by nearly 10,000 tonnes in a single auction," the official said. FCI began selling rice through weekly auctions from August at the revised reserve prices for 2025-26 (Apr-Mar). To liquidate surplus stocks, the corporation has been holding auctions twice a week on Wednesdays and Thursdays. 

 

"If the trend continues, we will reconsider our offer strategies," the official said, adding that FCI may lower the offer quantum or change regional allocations.

 

FCI was supposed to end the 2024-25 open market sales in March. But, with rice stocks rising to the highest level in two decades, the government directed FCI to continue offloading rice in the market till Jun. 30 at the reserve prices set for FY25. So far, FCI has sold 813,000 tonnes of rice through auctions under the scheme for 2025–26 (Apr–Mar), including the rice sold during Apr-Jun at the old prices.

 

FCI typically offers 100,000–150,000 tonnes at each auction, but offtake has been subdued at 20,000–30,000 tonnes, data from the corporation showed.

 

Market participants attributed weak demand to falling prices and cumbersome auction processes. "The market is down. Prices have been continuously falling for the last nine months. Traders can easily get rice from other sources, and FCI processes are too long," Rahul Chauhan, director, iGrain, said.

 

Expectations of fresh crop arrivals from October also weighed on market sentiment. Farmers have sown paddy over 43.2 million hectares as of Aug. 29, up 6.6% on year, according to government data.

 

Meanwhile, rice offtake for ethanol production remains slow. FCI has sold 2.36 million tonnes of rice to distillers, the official said. This accounts for only 45.5% of the 5.2 million tonnes earmarked for biofuel production in the ethanol supply year 2024-25(Nov–Oct).

 

Even as only two months are left for distillers to complete their purchases, rice offtake continues to be slow. Distillers have received allotments for about 4.0 million tonnes, and should lift the remaining 1.6 million tonnes before the supply year ends in October. The government expects only 3.0 million tonnes to be lifted by then, according to media reports.

 

According to experts, rice offtake for ethanol production has been slow due to operational issues such as delayed allocation announcements and late issuance of allotment letters. "Because we missed the first two cycles, the allotment happened late, as a result of which the offtake has not been as per our expectation," Food Secretary Sanjeev Chopra told Press Trust of India late August.

 

In May 2025, the government earmarked an additional 2.8 million tonnes of rice for ethanol production, raising the total allocation for 2024–25 (Nov–Oct) to 5.2 million tonnes, while the ethanol supply year started from November 2024. 

 

The increased rice allocation for ethanol production came as the government was grappling with surplus rice stocks. As of Aug. 1, rice stocks in the central pool stood at 38.0 million tonnes, up 16% on year and the highest in two decades for the month. In addition, paddy cultivation has been on the rise amid incentives like high minimum support prices and additional state bonuses for the grain.

 

For the upcoming kharif marketing season 2025–26 (Oct–Sept), the Centre has set a procurement target of 46.35 million tonnes, slightly lower than 48.5 million tonnes last year. From October, the share of broken rice allowed in procurement will be reduced to 10% from 25%. End

 

Edited by Saji George Titus

 

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