Government Greenlights Sale of 23 Lakh Tonnes of Rice to Ethanol Producers

The government has permitted the sale of up to 23 lakh tonnes of rice from the Food Corporation of India (FCI) stocks to grain-based ethanol distilleries. This decision aims to manage surplus rice stocks and create storage space for the upcoming harvest. Ethanol producers can participate in e-auctions between August and October 2024.

The government has approved the sale of up to 23 lakh tonnes of rice from Food Corporation of India (FCI) stocks to grain-based ethanol distilleries, overturning a ban imposed last year.

According to a directive from the food ministry, ethanol producers are now allowed to engage in e-auctions and acquire rice between August and October 2024 under the Open Market Sale Scheme (OMSS).

This decision is part of an effort to handle surplus rice stocks exceeding 540 lakh tonnes, aiming to free up storage space for the upcoming harvest. As per the ministry, a maximum of 23 lakh tonnes may be allocated for ethanol distilleries, which can purchase rice through weekly e-auctions. These purchases are subject to ethanol allocation by oil manufacturing companies. The previous ban on rice sales for ethanol production was put in place in July 2023, alongside restrictions on non-basmati white rice exports. Since last July, the FCI has been conducting e-auctions of rice to private traders to manage the excess inventory. This move marks a significant shift in the government's policy on using foodgrains for biofuel production, balancing food security concerns with the need to manage surplus stocks.

(With inputs from agencies.)