Amidst the fear of deficient monsoon rains, the government on Tuesday set a 5% higher kharif rice procurement target of 52.1 million tonne (MT) for 2023-24 season (October-September) compared to 49.5 MT purchased in the current season.
Kharif procurement contributes around 86% of the total rice purchased from the farmers by Food Corporation of India and state agencies under the Minimum Support Price (MSP) operation.
In the 2022-23 season, FCI have procured more than 56.96 MT of rice till end of July. The rice production in 2022-23 was estimated at a record 135.5 MT.
This year’s rice procurement drive would be closely monitored given the anticipated decline in production in 2023-24 season (July-June) because deficient monsoon rainfall in many parts of eastern India and floods in the many districts of Punjab, a major producer of rice, impacting the standing crops.
Higher grain procurement is expected to boost rice stocks held by FCI. The corporation is selling rice in the open market to bulk buyers through weekly auctions to curb rise in prices. However response has been sluggish from bulk buyers.
Retail inflation in rice in July was 12.96% on year, marginally higher from the previous month. The government last month had banned exports of white rice to improve domestic supplies.
FCI will be selling 2.5 MT of rice in the open market to cool down the prices
Currently the corporation has 37 MT of rice which includes 12 MT of grain receivable from the millers. The rice stock is against the buffer of 10.25 MT for October 1.
It annually supplies 35 MT of rice for supply to the beneficiaries under the National Food Security Act.
In the previous year, rice procurement was a record 57.58.2 mt. Rice production had hit a record 130.29 mt in the 2021-22 crop year.
Because of the delayed onset of monsoon, paddy transplanting was delayed. So far transplating has been completed in 36.06 million hectare which 4.1% up on year-on-year.
Rice transplanting has been completed in 90% of the normal area and the harvesting of crops will commence from October 1.
In June, the government had hiked the MSP for paddy, the key kharif crop, is fixed at Rs 2,183/quintal, up 7% on year.
Paddy arrivals in mandis in Punjab, Haryana, Uttar Pradesh and Tamil Nadu are during October-November period while arrivals of grain take place during December –January, in Andhra Pradesh, Telangana, Odisha, Chhattisgarh and other key producing states.
States including Punjab, Haryana, Chhattisgarh, Odisha, Telangana and Andhra Pradesh contribute significantly to the central rice pool which is used for supplying grain to beneficiaries under the National Food Security Act and free ratio scheme.
The rice procured from grain surplus states is also used for keeping a buffer stock with FCI.