For the first time in many years, the government has decided to sell surplus rice stock in the open market to bulk buyers and traders through e-auction.
Sources told FE that around three million tonne of rice would be offered under the Open Market Sale Scheme (OMSS) to bulk buyers at a rate equal to the minimum support price plus freight cost to destinations from Ludhiana, Punja b.
The rice is expected to be offered to private purchasers at around Rs 2,340 per quintal for grade A quality procured by the Food Corporation of India (FCI).
The inter-ministerial group (IMG) consisting of secretaries of the food, expenditure and consumer affairs department would be soon seeking a formal nod from food and financial ministries’ prior to grain sale.
Officials said that as per the FCI’s estimate, rice stock with the corporation at the end of March 2015 would be around 15.5 million tonne after taking into account receipt and offtake.
As per the revised buffer stock norms, FCI should hold rice stock of around 13.5 million tonne, thus rendering a chunk of stock as ‘excess’.
Sources said the minimum and maximum auction quantity would be in the range of 50 tonne to 3,500 tonne. “The state government would also be asked to participate in the e-auction for OMSS,” an official said.
The FCI has been selling excess wheat stock through OMSS to bulk buyers since 2009-10.The corporation has sold 3.5 million tonne of wheat in the open market till Friday 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 mor than 6.1 million tonne of wheat in the open market from its stock.
Meanwhile, FCI has asked the food ministry to launch OMSS for wheat stock just after procurement of grain for the 2015-16 season gets over by June 2015.
The FCI conducts a weekly auction to sell wheat in the open market using commodity bourse NCDEX.