No rice buyers in Food Corporation of India (FCI) e-auction after refusing to supply rice to Karnataka

It has been reported that no one has come forward to buy rice in the Food Corporation (FCI) e-auction after states including Karnataka were denied permission to buy rice under the open market sale scheme.

The central government, which had ordered states not to sell rice, had directed the Food Corporation of India (FCI) to conduct e-auction of rice and wheat grains to control rising prices in the market. But despite auctioning 3.86 lakh metric tonnes of rice last week, FCI received bids for only 170 metric tonnes. It is clear that many buyers are not forthcoming. FCI faced this dilemma as state governments could not participate in this bid and only private entrepreneurs could participate.

In the e-auction held on July 5, FCI offered to sell 3.86 lakh metric tonnes of rice in 19 states and the NEF (North East Frontier) region. But only Maharashtra (70 MT), Gujarat (50 MT) and Karnataka (40 MT) – and the NEF region (10 MT) – bid the lowest. The remaining 16 states have not even submitted bids.

Just a month ago, the Karnataka government had requested 2.28 lakh metric tonnes from FCI to provide 10 kg of food grains per person per month free of cost to all BPL families under Anna Bhagya Yojana. In two letters dated June 12, FCI had agreed to supply around 2.22 lakh metric tonnes. But a day later, the Union Ministry of Consumer Affairs, Food and Public Distribution directed FCI against selling grains to state governments. On June 14, the FCI canceled the rice allocation order for Karnataka.

FCI also decided to sell rice through e-auction as per the instructions of the central government. But out of 3 lakh 86 thousand tons of rice, bids have been submitted for only 170 tons. So the solution to this problem is that the central government should withdraw the order brought by the states not to buy rice under the open market sale scheme.

Before June 13, states were buying rice (including fortified rice) from FCI at Rs 3,400 per quintal for their own schemes without participating in the e-auction. States have procured 1.16 lakh metric tonnes of rice till May 25 in 2023, the FCI website says. 97 percent (1.12 metric tonnes) of it was purchased by the state of Karnataka alone.

Tags: Grains, wheat, Market, FCI, Food Corporation of India, e-auction, Karnataka, prices, rice