The government is preparing to release a record 10 million tonnes (MT) of rice into the open market this fiscal year. The move aims to reduce the rising burden of surplus stocks and control storage costs.

Record Supply to Hit the Market

So far, the Food Corporation of India (FCI) has released 6.1 MT of rice. These volumes went through the open market sale scheme, allocations to states, ethanol manufacturing, and the Bharat Rice initiative.
Now, with the new allocation for the ethanol blending programme starting November 1, the total supply is expected to cross 10 MT, making it the highest ever.

Ethanol Units Receive Additional Allocation

Officials confirmed that the government has allocated 1.75 MT of extra rice to ethanol producers. This step supports India’s push for higher ethanol blending in fuel and ensures better utilisation of surplus grain.

Surplus Stocks Remain at Elevated Levels

Despite heavy offloading, India’s central pool still holds over 44 MT of rice, which is more than three times the buffer requirement of 10.25 MT for October.
About 10 MT of this volume is pending from millers and will enter FCI warehouses soon.

Rising Stockpile May Increase Subsidy Burden

The government estimated a food subsidy of ₹2.03 lakh crore for FY25. However, the subsidy bill could rise by ₹22,000 crore due to the high carrying cost of surplus grain.
Officials warn that without reducing stock to comfortable levels, storage and maintenance costs will continue to increase.

High Procurement Drives the Stock Buildup

Every year, FCI and state agencies purchase 52–53 MT of rice under the MSP system. Meanwhile, only 36–38 MT is distributed through PMGKAY, the free-ration scheme.
This consistent surplus pushes stock levels higher each year.

Revised Pricing for Rice Allocation

The government has updated base prices for FY26:

• Ethanol units: ₹2,320/quintal
• States: ₹2,250/quintal
• Bharat Rice: ₹2,400/quintal
• Bulk buyers (e-auction): ₹2,800/quintal

These prices come into effect from November 1, 2025.

Wheat Sales Under OMSS to Start Soon

FCI will also begin selling wheat under OMSS. The government has set 3 MT for sale during this fiscal. The base price for OMSS wheat is ₹2,550 per quintal, applicable for FY26.

Industry Impact and Market Outlook

This record offloading will likely influence rice prices in India. The move may also affect India’s competitiveness among the top 10 rice exporters in India and the top rice exporters companies in the world.
Experts believe that reducing stock pressure will help stabilise the market and strengthen India’s supply chain efficiency.