The government’s central-pool rice stocks continue to surge despite record offloading of grain through open market sale, liberal allocations to states, and for ethanol manufacturing and Bharat rice initiative in the current fiscal. Open mark sales in FY26 have surpassed a record 5.6 million tonne (MT), higher than the FY25 sale of 4.63 MT.
Sources said that the government may offload about 6 to 7 MT of rice this fiscal from its surplus stocks of Food Corporation of India (FCI).
The current central pool stock is over 47 MT, over 3.5 times the buffer of 10.25 MT for October 1.
Officials said the current stock with FCI includes about 10 MT of grain yet to be received from millers.
During April 1 – October 8 (2025-26), FCI supplied 2.46 MT (ethanol), 2.06 MT (state social welfare schemes) 1.03 MT (e-auction) and 0.06 MT (Bharat rice).
In FY25, the FCI had allocated 4.63 MT of rice to the state’s social welfare scheme (1.12 MT), open market sale scheme (1.96 MT) and ethanol manufacturing (2.3 MT).
In FY24 and FY23, FCI had sold 1.54 MT and 1.78 MT of rice respectively offloaded through various schemes to bulk buyers.
Sources said that if rice stocks are not brought down to a comfortable level, the carrying cost of grain will steadily rise and may lead to a spike in food subsidy expenses.
While the government has estimated food subsidy at Rs 2.03 lakh crore in FY25, actual subsidy bills could rise by Rs 22,000 crore due to the rising cost of holding surplus grains far in excess.
High procurement and robust crop output are the reasons for the stocks being high. Annually the FCI and state agencies purchase around 52 MT to 53 MT of rice from farmers under minimum support price (MSP) while the corporation supplies around 36 to 38 MT of rice for the PMGKAY or free ration scheme.
Under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), 810 million people are currently being provided 5 kg each of specified grains per month free of cost. The free ration scheme is being extended till the end of 2028 and it would cost the exchequer Rs 11.8 trillion.
For the government, the economic cost of rice, including MSP, storage, transportation and other costs at the beginning of the current fiscal was estimated at Rs 41.73/kg which may see an increase due to surplus rice stock.
The government has fixed reserve price of rice at Rs 2250/quintal (for ethanol), Rs 2250/quintal (states), Rs 2400/quintal (Bharat rice) and Rs 2800/quintal (for bulk purchase on e-auction) till October 31, 2025.
FCI has not commenced open market sale of wheat so far in the current fiscal, while it announced Rs 2550/quintal as the base price for FY26.
Meanwhile, paddy procurement drive by agencies for the 2025-26 season (October-September) has commenced on a brisk note with purchase of 3.41 MT of paddy till now against only 0.91 MT purchased during the same period 2024-25 season.
The government last month had fixed a rice procurement target of 46.35 MT for the kharif marketing season 2025-26 (October–September), marginally lower than the purchase of 47.38 MT of grain in the previous season.