India hopes for uptick in rice procurement, cool down in prices after tepid response in 1st e-auction
The Union Government is confident of attracting more bidders in future rounds of e-auction of rice under open market sale scheme (OMSS) despite a tepid response in the first e-auction held on July 5. The OMSS is aimed at cooling down rice prices by signalling the market about the availability of ample stocks with the government, stated Food Secretary Sanjeev Chopra.
Chopra also pointed out that there has been an 11 percent rise in prices of rice since last year.
The e-auction for rice conducted by the Food Corporation of India (FCI) had attracted bids only for 170 metric tonnes (MT) despite offering a total of 3.86 lakh metric tonnes (LMT) rice.
Additionally, last month, FCI had stopped sale of foodgrain to state governments, evoking a strong reaction from the Congress-led Karnataka state government which had sought 2.28 LMT foodgrains from the central government for free distribution to families living below the poverty line in the state.
Stating that a wrong narrative was being created regarding OMSS, the Food Secretary said the OMSS was being undertaken in the country’s larger interest and the government needed to keep surplus stocks in hand for possible market interventions in future. He also added that weather disturbances and El Nino may decrease rice procurement.
Pointing to India’s total need for rice under Pradhan Mantri Garib Kalyan Yojana (PMGKY) at 360 LMT, he explained that an additional 5 kg allocation to each BPL (Below Poverty Line) beneficiary as sought by Karnataka would have required a total rice procurement of 720 LMT. The government wouldn’t have been able to meet the resultant shortfall as the total rice procurement is 560 LMT per year, Chopra stated.
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