Central pool rice stocks four times the buffer
Despite record offloading of 4.63 million tonnes of rice through various schemes in FY25, India’s central-pool rice stock has surged past 59 million tonnes—over four times the July buffer norm. This surplus stems from high procurement and robust output. Officials warn that if stocks aren’t reduced, food subsidy costs, pegged at ₹2.03 lakh crore, may rise further.
The government’s central-pool rice stocks continue to surge despite record offloading of grain through open market sale, allocation to states, for ethanol manufacturing and Bharat rice initiative in FY25.
Sources told FE that while 4.63 million tonne (MT) of rice from the Food Corporation of India (FCI) stocks was offloaded in the market at subsidised rates through various initiatives in FY25, the current central pool stock is over 59 MT, four times the buffer of 13.54 MT for July 1.
Officials said the current stock with FCI includes about 21 MT of grain yet to be received from millers. High procurement and robust crop output are the reasons for the stocks being high.
The government annually distributes over 36 MT of rice under public distribution system (PDS) while procurement of grain is over 50 MT annually leading to piling up of stocks.
On the possibility of storage crunch in coming months because of surplus stock, food secretary Sanjeev Chopra had said “issue about the storage of rice is no longer there, unlike the position three to four months back.”
“From June onwards, we will be allocating grain for PDS till the new arrivals start coming a couple of months after commencement of the new procurement season from October 1,” he said.
The paddy procurement season for 2025-26 season (October-September) commences from October 1.
After procurement of paddy by FCI and state government owned agencies from the farmers at minimum support price (MSP), the grain is handed over the millers for conversion to rice. “Actual rice arrivals in the next season would start arriving by December after commencement of procurement from October 1,” an official said.
Under the Pradhan Mantri Garib Kalyan Anna Yojana , 810 million people are currently being provided 5 kg each of specified grains per month free of cost. The free ration scheme is being extended till the end of 2028 and it would cost the exchequer Rs 11.8 trillion.
For the government, the economic cost of rice, including MSP, storage, transportation and other costs at the beginning of the current fiscal was estimated at Rs 41.73/kg which may see an increase due to surplus rice stock.
Sources said that if rice stocks are not brought down to a comfortable level, the carrying cost of grain will steadily rise and may lead to a spike in food subsidy expenses.
The government has estimated food subsidy at Rs 2.03 lakh crore in FY25.
In FY25, rice allocated for various schemes were bulk sales under open market sale scheme (1.96 MT), Bharat rice (1.31 MT), allocation to grain deficient states (1.12 MT) and raw material for ethanol manufacturing (0.23 MT).
In 2023-24, only 0.19 MT of rice was offloaded through OMSS to bulk buyers at Rs 2900/quintal out of total offloading of grains of only 0.64 MT.
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Source : Financial Express
