States to buy rice from FCI outside e-auction window
By Sandip Das
The government has allowed grain deficient states to buy rice directly under the open market sale (OMSS) of the Food Corporation of India (FCI) without participating in the electronic-auction (e-auction) from August 1.
Under OMSS, the FCI would offload rice to the state governments at Rs 2800/quintal from next month, while the government had decided to stop the sale of rice to states including Karnataka last year.
The surplus rice from FCI stocks would also be sold to bulk buyers through e-auction at the base price of Rs 2800/quintal.
“State governments of non-surplus states which require additional rice to meet their requirements will be allowed to purchase rice under OMSS without participating in e-auction..,” the food ministry said in a statement in Rajya Sabha on Tuesday.
The FCI currently holds 45.57 million tonne (MT) — 32.68 MT of rice stocks and 12.89 MT of grain receivable from millers. The stock is against the buffer of 10.25 MT for October 1.
The government is aiming to reduce the huge surplus of rice stocks prior to the commencement of the new procurement season (2024-25) from October 1.
Last year, the Karnataka government had asked FCI for 0.22 MT of rice which was to be distributed to all BPL families in the state at 10 kg/family a month under the Anna Bhagya scheme. The FCI had initially agreed to supply close to 0.22 MT of rice to the state, however subsequently the food ministry cancelled the rice allocation.
Last fiscal, the government’s move to offload rice to bulk buyers through weekly e-auction did not find encouraging response from the trade. Only 0.19 MT of rice was offloaded through OMSS to bulk buyers at Rs 2900/quintal.
Given the surplus rice stocks and robust kharif sowing, the government is also considering relaxing the restrictions on the grain’s trade. It may allow increased shipments of rice varieties under government-to-government (G2G) contracts from its stocks and may even lift some of the general export restrictions imposed last year.
States including Punjab, Haryana, Madhya Pradesh, Rajasthan, Odisha, Chhattisgarh, Andhra Pradesh and Telangana are rice and wheat surplus and contribute significantly to the central pool stock through the minimum support price (MSP) procurement.
With overall monsoon rainfall this season till Tuesday has been just 2.1% above the benchmark long period average or normal range, it has given a boost to kharif paddy sowing. Till July 26, 2024, the area under paddy, the most important kharif crop, was 21.5 million hectare just below the previous years’ level.
This article has been republished from The Financial Express.