E-auction of grains frozen amid kharif uncertanties
Despite record food grain stocks, the Indian government has not earmarked rice and wheat for open market e-auctions in FY2026–27, citing uncertainty over the kharif crop due to weak monsoon conditions. Rice allocation for ethanol production has also been frozen, while 4.8 million tonnes of rice has been reserved for state welfare schemes.
Despite record-high food grain stocks, the government has chosen to tread cautiously while allocating rice and wheat for open market sales in the current financial year. Considering the uncertainties over the kharif crops due to delayed and scanty monsoon rains, the government did not allocate gains for e-auction, which has gathered momentum in recent years. Rice allocation for ethanol manufacturing has also been frozen.
However, 4.8 million tonnes (MT) of rice has been allocated to state government welfare schemes from the Food Corporation of India (FCI)’s stock.
In FY26, a record 10.52 MT of rice was sold. This included e-auction (1.46 MT), state welfare scheme (3.75 MT) and ethanol manufacturing (5.22 MT). Only 0.68 MT of wheat was sold last fiscal to bulk buyers under the open market sales scheme due to higher private inventories.
Pricing a Tiered Market
According to the scheme approved by the food ministry for the current fiscal which is valid until June 30, 2027, broken rice will be sold at Rs 2,320/quintal until October 31, 2026 and Rs 2,390/quintal from November 1 for distilleries to produce ethanol. The quantity of rice diverted toward ethanol will be decided by the committee of ministers chaired by home minister Amit Shah.
Base price of rice sold to small private traders, entrepreneurs, individuals directly from the FCI depot is fixed at Rs 2,890/quintal until October 31 and Rs 2,970/quintal from November 1. The price for allocation to states without going through the e-auction route will be Rs 2320/quintal and Rs 2390/quintal respectively.
The base price of wheat to be sold to millers and bulk buyers through e-auction is fixed at Rs 2600/quintal for fair and remunerative quality (FAQ) stock and Rs 2585/quintal for grain purchased under relaxed quality norms. The FCI purchased over 34 MT of wheat from farmers during the 2026-27 marketing season (April-June); a chunk of this wheat was purchased under relaxed quality norms because the crop was impacted by unseasonal rains.
Buffer Luxury
Central pool grain stocks are at a record 91.6 MT which is likely to offer a cushion against any possible shortfall in foodgrain production due to El Niño risks.
At present, the FCI has 40 MT of rice and 51 MT of wheat against a buffer of 13.54 MT (rice) and 27.58 MT (wheat) for July 1 respectively. Current rice stock excludes over 27 MT of rice yet to be received by the corporation from the millers.
Due to surplus grain stock, the FCI’s economic cost, including minimum support price (MSP), storage, transportation and other costs, of rice and wheat in the FY27 is estimated at Rs 4391/quintal and Rs 3145/quintal respectively.
“Quantum of stocks to be offloaded, and timing, considering stocks holding at the relevant point of time will be decided by FCI in consultation with department of food and public distribution after keeping the stocks for public distribution requirement, buffer norms and additional quantity of 3 MT (rice) that can be used in case of any exigency,” according to an official note.
The food ministry has also directed FCI to formulate adequate safeguards to ensure that the rice and the resultant broken rice sold under OMSS is not recycled back through the procurement system.
In FY25, the FCI allocated 4.63 MT of rice to state social welfare schemes (1.12 MT), OMSS (1.96 MT) and ethanol manufacturing (2.3 MT). In FY24 and FY23, the FCI offloaded 1.54 MT and 1.78 MT of rice, respectively, through various schemes to bulk buyers.
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Source : Financial Express
