Govt orders traders to declare rice stocks; starts retail sale at Rs29/kg to check price rise

In a move that will deter traders from steadily pushing up rice prices, the government on Friday directed all traders to declare rice stocks with them, even as it released FCI stocks into the open market though retail sale of `Bharat Rice,’ priced at Rs29 per kg.

The sale, being carried out through state agencies including, NAFED, NCCF and Kendriya Bhandar, aims at reining in high inflation levels that are fed by rising food prices.

In the first phase, government will offload 5 lakh tonnes of rice that will be sold to the general public in 5 kg and 19 kg bags. The rice will be made available through physical outlets of the three central cooperatives, mobile vans and through e-commerce platforms.

Despite huge domestic stocks and distribution of rice and wheat to the poor and the needy free or at very low prices through PDS outlets across the country, rice prices have been  showing a firm trend, making a mockery of the Narendra Modi government’s food security initiatives.

Domestic supply of foodgrains – both rice and wheat - has been high with continued expansion of production and ample stocks with the Food Corporation of India (FCI). Government has also put in place restrictions in export of rice despite successive gains in production and availability in the pipeline, in order to check price rise.

Retail prices of rice in the country are reported to have increased by an estimated 14.51 per cent over the last year and FCI has been finding it difficult to manage prices despite its open market sales that are mostly absorbed by traders and millers.

The order issued by the Department of Food and Public Distribution on Friday mandates that all major intermediaries, including wholesalers, retail traders, big chain retailers and millers in all states and union territories declare the stocks of rice/paddy with them. Also, the department wants the declaration of stocks made on a weekly basis.

The department also said that all traders and businesses like millers declare stocks of paddy and rice in all categories, including basmati, paddy, while rice, parboiled rice, broken rice etc.

“The retail prices have increased by 14.51 per cent over the past year. In an effort to curb the prices of rice, various steps have already been taken by the government,” the department stated in its release.

Sufficient stock of good quality Rice is available with 

FCI has been making available good quality rice to traders/wholesalers under OMSS, The government has also reduced the reserve price of rice to Rs2,900 from Rs3,100 per quintal and increased the minimum and maximum quantity of rice made available in order to push up the sale of rice in the open market.

While OMSS rice sale has picked up in recent times, reaching 1.66 lakh tonnes till 31 January 2024, there has been no letup in the increase in prices.

The export policy of broken rice was amended from “Free” to “Prohibited” and an export duty of 20 per cent imposed on export of non-basmati rice beginning September 2022 in order to bring down prices. Non-basmati rice, which constitutes about 25 per cent of total rice exports, 

The export policy of non-basmati white rice was also amended to ‘Prohibited’ with effect from 20 July 2023, following which registration of contracts for basmati exports was limited to those with a value of $950 or above per tonne for issue of Registration–cum– Allocation Certificate (RCAC). Further, 20 per cent export duty was imposed on parboiled rice, which will be applicable till 31 March 2024. While these measures have helped to slow the pace of price rise, rice prices continue to maintain a firm trend.

All these measures have curbed the pace of increasing trend of rice prices in domestic market.

The government has also allocated 10.15 million tonnes of wheat, at a reserve price of Rs2,150 per quintal for FAQ and Rs2,125 per quintal URS, for sale in the open market through weekly e-auction beginning 28 June 2023. Weekly sales have since been increased gradually from 2 lakh tonnes to 4.5 lakh tonnes, in order to increase open market availability of wheat.

So far (till 31 January 2024), 75.26 LMT wheat has been sold under OMSS (D). The government has now decided to enhance the quantity of wheat being offered under OMSS in the weekly auctions to 5 lakh tonnes and the lot size to 400 tonnes.