Informist, Monday, Jul. 14, 2025

By Afra Abubacker

NEW DELHI – The Food Corp. of India has so far sold 1.74 million tonnes of rice to distillers for ethanol production, an FCI official said. This accounts for just 33.5% of the 5.2 million tonnes earmarked for biofuel production in 2024–25 (Nov–Oct). Distillers can purchase the rice until the end of October.

Bharat Petroleum Corp. Ltd. has issued allotment letters to distillers for the entire earmarked 5.2 million tonnes of rice, but the offtake has been slow due to logistical and operational challenges, the official said. FCI expects distillers' purchases to pick up pace in the coming months.

To offload surplus rice in government godowns, the Centre recently expanded the allocation for ethanol production by 2.8 million tonnes, raising the total to 5.2 million tonnes. As of Jun. 1, rice stocks in the central pool stood at a two-decade high of 38.0 million tonnes, amid high government purchases and state-level bonuses over the minimum support price for paddy.

To attract distillers, FCI is offering rice for ethanol production at a heavily subsidised rate of INR 2,250 per 100 kg, significantly below the economic cost of INR 3,975 per 100 kg. The recently announced revised rate of INR 2,320 per 100 kg will apply from Nov. 1 to Jun. 30, 2026.

FCI is yet to begin wheat and rice open market sales for 2025-26 marketing year. According to the official, the Department of Food and Public Distribution has not yet issued directives on the timing or volume of open market sales, the official said. Wheat sales may begin only after October, he added.

Some trade experts believe the government should wait until September to begin wheat sales. "That's when demand rises, and pipelines start drying up ahead of festivals. Last year, they sold 3 million tonnes (of wheat). This year, they can offer 5 million tonnes," G.K. Sood, chairman of MEIR Commodities India Ltd., told Informist earlier.

In 2024-25 (Apr-Mar), FCI sold 2.96 million tonnes of wheat, close to the entire allocation of 3.00 million tonnes for the year, amid robust demand from millers and processors. In contrast, only 2.4 million tonnes of rice were sold from the 4.0 million tonnes allocated due to tepid demand amid good supply in the domestic market.

This year, the government is estimated to have 15.0 million tonnes of excess wheat, the official said. Of this, however, it may not release more than 6.0 million tonnes into the market under the open market sales scheme. The government procured 30.1 million tonnes of wheat in the 2025-26 rabi marketing season, and had an opening stock of nearly 12 million tonnes in April. Last year, the government added 3.5 million tonnes to the 18.4 million tonnes of wheat allocated under the Pradhan Mantri Garib Kalyan Anna Yojana till March 2025. End

Edited by Tanima Banerjee

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