Ethanol distilleries can buy 23 lakh MT rice from FCI: Govt

“The rice may be allowed for lifting subject to allocation of ethanol to the concerned distilleries by OMCs using FCI rice as feedstock,” it said.

A “maximum of 23 LMT rice may be allowed for lifting to ethanol distilleries,” it said.

As per the order, the decision to allow distilleries to participate in the auction of FCI was taken by the “Competent Authority”.

As per the Food Ministry order, the distilleries can buy rice under the FCI’s Open Market Sale Scheme (OMSS).

In July last year, the Centre had halted supply of the FCI rice to distilleries for ethanol production.

The Ethanol Supply Year spans from December 1 of a calendar year to November 31 the following year. In March 2020, the Centre had decided to supply FCI rice to distilleries for production of ethanol at a rate of Rs 2,250 per quintal under the Open Market Sale Scheme (Domestic). The rate was reduced to Rs 2,000 per quintal in December 2020, and it has continued supplying at the same rate since.

The price of rice supplied for ethanol was much lower compared to the economic cost incurred by the FCI on procurement and storage operations: these were Rs 3,939.26 per quintal in 2020-21; Rs 3,562.49 in 2021-22; Rs 3,858.19 in 2022-23 (revised estimates); and Rs 3,918.05 per quintal in 2023-24 (BE).

The FCI has supplied over 24 lakh MT rice to distilleries for making ethanol since December 2020 till July 2023.

The Centre had also suspended supply of FCI rice to states last year. Earlier this month, Food Minister Pralhad Joshi announced that states can directly purchase rice from Food Corporation of India (FCI) under the Open Market Sale Scheme (Domestic) (OMSS [D]) without participating in the e-auction from August 1st, 2024. Under the OMSS (D), the states can buy rice for Rs 2,800 per quintal (excluding the cost of transportation). He also said that the sale of atta and rice under the ‘Bharat’ brand will continue.