The Government raises the reserve price for wheat and rise sold under the open market sale scheme (OMSS)

The Indian government has decided to increase the reserve price for wheat and rice, including broken rice, sold under the open market sale scheme (OMSS). The revised pricing will also apply to broken rice used by distilleries for ethanol production.

During a recent meeting on June 26, the Committee of Secretaries (CoS) set a reserve price for coarse grains under OMSS, which will remain effective until June 30, 2026. Additionally, the Department of Food and Public Distribution (DFPD) will incorporate transportation costs into the reserve price.

According to an office memorandum from the Ministry of Finance, wheat will now be sold through OMSS at INR 2,550 per quintal for all crop years, including the 2025-26 rabi marketing season. This replaces the previous rates of INR 2,325 per quintal for fair average quality (FAQ) wheat and INR 2,300 for under relaxed specifications (URS) wheat. The new pricing will take effect once the Centre announces the OMSS for wheat later this fiscal year.

For rice, the revised reserve price will come into force from October 1, with current rates remaining valid until October 31.

The government uses OMSS to sell wheat and rice from Food Corporation of India (FCI) stocks to curb food inflation. This decision is backed by FCI’s record rice stocks of 37.99 million tonnes as of June 1, along with 32.25 million tonnes of unmilled paddy that can yield 21.6 million tonnes of rice. Additionally, FCI holds 36.92 million tonnes of wheat and 0.46 million tonnes of coarse grains, both at three-year highs.  Over the past two years, OMSS wheat sales have helped moderate wheat prices.

For rice sold directly to state governments, state corporations, and community kitchens, the price has been raised to INR 2,320 per quintal from INR 2,250, with a cap of 32 lakh tonnes.

For ethanol production, distilleries will now pay INR 2,320 per quintal for rice, up from INR 2,250, with a limit of 52 lakh tonnes. Small private traders, entrepreneurs, and individuals will pay INR 2,890 per quintal, compared to the previous INR 2,800. Central cooperative organisations like Nafed, NCCF, and Kendriya Bhandar will be offered rice at INR 2,480 per quintal (previously INR 2,400) for Bharat brand rice sales.

For rice with 25% broken grains sold via e-auction to private traders and cooperatives, the reserve price has been increased to INR 2,890 per quintal from INR 2,800. Rice with 10% broken grains under the rice mill transformation scheme will be sold in the open market at INR 3,090, up from INR 3,000. Broken rice from the same scheme will now be priced at INR 2,320 per quintal, compared to the earlier INR 2,250.

The CoS has also fixed reserve prices for coarse cereals: INR 2,775 per quintal for bajra, INR 4,886 for ragi, INR 3,749 for jowar, and INR 2,400 for maize.

The memorandum stated that FCI, in consultation with DFPD, will determine the quantity and timing of wheat and rice sales under OMSS, considering stock availability while ensuring sufficient reserves for the public distribution system (PDS) and buffer norms. An additional 20 lakh tonnes of wheat and 30 lakh tonnes of rice will be reserved for emergency use.

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Additionally, the CoS decided to discontinue the INR 200 per quintal subsidy from the price stabilisation fund for rice sales to central cooperative organisations like Nafed, NCCF, and Kendriya Bhandar from July 1. These entities had been distributing Bharat brand rice procured from FCI at a lower price.