Two weeks into the paddy procurement by the Food Corporation of India (FCI) and state agencies for the kharif season – 2023-24 (October-September), the purchase under the minimum support price (MSP) operations from farmers has crossed 5.6 million tonne (MT) on Monday, which is an increase of 6% on year.
According to the food ministry, 6.4 MT of paddy has arrived in the mandis mostly in Punjab, Haryana and Tamil Nadu so far.
So far, major contributors to paddy procurement include Haryana (3.31 MT), Punjab (1.97 MT) and Tamil Nadu (0.28 MT). MSP purchase operations have commenced in Uttar Pradesh and Uttarakhand.
This year’s grain procurement drive would be closely monitored as the uneven distribution of monsoon rainfall this season may impact the rice output in 2023-24 crop year (July-June) despite higher area under paddy cultivation.
Although in its early days, paddy arrivals in mandis especially in Punjab and Haryana, major contributors to the central pool stocks are expected to peak by the end of the month.
“We expect paddy arrivals to peak around October 25, as farmers are in the process of completing harvesting of paddy,” an official with Punjab’s food and civil supplies department at Khanna mandi, country’s biggest grain market, told FE.
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.
In August, the FCI and state government agencies had set a 52.1 MT of rice (77.4 MT of paddy) purchase target in this kharif season against 49.5 MT of grain procured from farmers in the previous season.
In terms of state-wise procurement target for rice, the agencies are aiming to purchase grain including Punjab (12.2 MT), Chhattisgarh (6.1 MT), Telangana (5 MT), Odisha (4.4 MT), Uttar Pradesh (4.4 MT) and Haryana (4 MT).
In the 2022-23 season, FCI and state agencies have procured more than 56.94 MT of rice both in kharif and rabi season. The rice production in 2022-23 was estimated at a record 135.5 MT.
Rice has been transplanted in 41.1 million hectare (MH), more than last five year average of 39.9 MH and up 3% on year.
At present, the corporation has 32.28 MT of rice which includes 10.29 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 (NFSA).States including Punjab, Haryana, Chhattisgarh, Odisha, Telangana and Andhra Pradesh contribute significantly to the central rice pool which is used for supplying grain to NFSA beneficiaries. The rice procured from grain surplus states is also used for keeping a buffer stock with FCI.
The government has increased the MSP of the common variety of paddy by more than 7% to Rs 2,183/quintal for 2022-23 season compared to the previous season.
After paddy is procured from the farmers by FCI and state agencies, it is handed over to millers for conversion into rice. Paddy to rice conversion ratio is 67%.
Retail inflation in rice in September was 11.9% on year, marginally higher from the previous month.
FCI is currently selling 2.5 MT of rice in the open market to cool down the prices from its stock.