After a gap of several years, the government will sell its rice stocks in the open market in the next fiscal.
After a gap of several years, the government will sell its rice stocks in the open market in the next fiscal. According to sources, given the excess stocks, two million tonne of rice will be offloaded by the Food Corporation of India in the open market starting April 1.
The food ministry has received the nod from the finance ministry to sell rice from the stocks to bulk buyers such as millers and traders, the sources added. The stocks would be sold through a weekly e-auction under the open market sale scheme (OMSS), currently in operation for selling wheat to bulk buyers by the FCI.
Sources said rice would be offered to private buyers or traders at around R2,300 per quintal for the grade-A quality of rice procured by the FCI.
“The rice prices have been kept at the level, keeping in mind the minimum support price, MSP, for ruling out recycling of rice procured by the FCI and state agencies,” an official said.
Officials said that at the start of this month, the FCI has rice stocks of more than 15.2 million tonnes and another 8.8 million tonnes are still to be received from the millers.
As per the revised buffer stock norms for April, 2015, the FCI should hold rice stocks of around 13.5 million tonnes, thus rendering a chunk of rice stocks as ‘excess’.
Sources said the minimum and maximum auction quantity would be in the range of 50 tonne to 3,500 tonne. “The state governments would also be asked to participate in the e-auction for OMSS),” an official said.
The FCI has been selling excess wheat stocks through OMSS to bulk buyers since 2009-10. It has sold 4.1 million tonnes of wheat in the open market till the end of February through weekly e-auctions.
However, the government had set a target of uploading 10 million tonne of wheat under OMSS by March 2015, which is unlikely to materialise.
In 2013-14, the FCI sold more than 6.1 million tonnes of wheat in the open market from its stocks. Meanwhile, the food ministry has also got a nod from the finance ministry to extend OMSS wheat till March end. Earlier, the OMSS wheat auction used to be held till end of February and March was meant for delivery of grain to bulk buyers.
“We will hold weekly auction for selling wheat till March 26 and the delivery of grain would be done in April,” an FCI official said.
The FCI has asked the food ministry to launch OMSS for wheat stocks immediately after the procurement of grain for the 2015-16 season gets over by June 2015.
While the wheat purchases from the farmers for the current rabi marketing season is set to commence from April 2015, the FCI has huge wheat stocks of close to 20 mt at the start of March 2015 while the buffer stocks norm is only 6.5 mt.
The FCI conducts weekly auction to sell wheat in the open market using commodity bourse NCDEX platform. The government has set a reserve price of R1,500 per quintal plus freight cost to the consuming locations.