The Central Pool’s Rice Stocks Quadruple the Buffer Supply
Surge in India’s Central Pool Rice Stocks Amid Record Offloading
India’s central pool rice reserves have reached over 59 million tonnes (MT), quadrupling the buffer requirement, despite exceptional grain offloading throughout FY25 via various channels including the Public Distribution System (PDS), ethanol processing, the Bharat rice initiative, and direct market sales. Robust procurement and output have contributed to this surplus, raising alarms about storage capacities and escalating costs tied to food subsidies.
The upcoming paddy procurement season for 2025-26, which runs from October to September, is set to begin on October 1. According to reports, even after record offloading of 4.63 MT of rice by the Food Corporation of India (FCI) at subsidized prices through numerous initiatives during FY25, the central pool still holds more than 59 MT of rice—significantly above the 13.54 MT buffer norm established for July 1.
Officials have indicated that the current stockpile at FCI also contains around 21 MT of rice awaiting collection from millers. The abundance of stocks is primarily attributed to high procurement rates and strong crop yields. The government typically distributes over 36 MT of rice yearly under the PDS while procuring in excess of 50 MT annually, resulting in an accumulation of stocks.
Addressing concerns about potential storage issues in the coming months due to this surplus, Food Secretary Sanjeev Chopra stated that “the challenge regarding rice storage is no longer present, contrasting the situation from three to four months ago.” He added that from June onward, grain will be allocated for PDS until new harvests come in, which usually begins a couple of months after the start of the procurement season on October 1.
Following the procurement of paddy from farmers at the minimum support price (MSP), the grain will be processed by millers into rice. According to an official, “The true arrival of rice for the next season is expected to commence in December, following the initiation of procurement on October 1.”
The Pradhan Mantri Garib Kalyan Anna Yojana currently provides 5 kg of specific grains each month to 810 million individuals at no cost. This free ration program is expected to continue until the end of 2028, with projected expenses amounting to Rs 11.8 trillion for the government. At the outset of the current fiscal year, the estimated economic cost of rice—factoring in MSP, storage, transportation, and additional costs—was around Rs 41.73 per kg, a figure likely to rise due to the excess rice stocks.
Experts warn that if rice levels are not reduced to manageable amounts, the ongoing cost of storage could escalate, leading to increased food subsidy expenditures. The government forecasts food subsidies to reach Rs 2.03 lakh crore in FY25. In FY25, the distribution of rice was comprised of bulk sales under the open market sale scheme (OMSS) totaling 1.96 MT, Bharat rice allocations of 1.31 MT, grain support for deficit states at 1.12 MT, and raw materials for ethanol production amounting to 0.23 MT. Conversely, in 2023-24, only 0.19 MT of rice was sold via OMSS to bulk buyers at Rs 2900 per quintal, with total grain offloading capped at a mere 0.64 MT.
