After denying rice to Karnataka, FCI struggles to find bidders in e-auction

As the government decided to stop the sale of rice to states including Karnataka through Open Market Sale Scheme - Domestic (OMSS-D) and directed the Food Corporation of India (FCI) to organise e-auction for the grains in the market to control price rise, the FCI is struggling to find buyers, The Indian Express (IE) has reported.

For a total of 386,000 metric tonnes of rice on offer, the FCI received bids for only 170 metric tonnes. The e-auction was organised on July 5 and FCI put 386,000 metric tonnes of rice for sale across 19 states and North East Frontier (NEF) region. Out of this, 150,000 metric tonnes was reserved for Punjab, followed by Tamil Nadu (49,000 metric tonnes), and Karnataka (33,000 tonnes).

However, FCI received bids from only three states - Maharashtra (70 metric tonnes), Gujarat (50 metric tonnes), Karnataka (40 metric tonnes), and the NEF region (10 metric tonnes), the IE report cited data from M Junction Services Ltd, the agency that is conducting the online auction.

There were no buyers from other states which included Himachal Pradesh, Arunachal Pradesh, Tamil Nadu, Punjab, Bihar, Jammu & Kashmir, Andhra Pradesh, Odisha, Nagaland, Delhi, Kerala, Uttar Pradesh, West Bengal, Jharkhand, Uttarakhand, and Rajasthan bought any rice.

Only private entities were eligible to participate in the auction. The weighted average selling price of rice was Rs 3,175.35 per quintal against the reserve price of Rs 3,173 per quintal across the country, the report said.

Recently, the government of Karnataka had asked FCI for 228,000 metric tonnes of rice which was to be distributed to all BPL families in the state at 10 kg per family per month under the Anna Bhagya scheme. In a letter dated June 12, the FCI had agreed to supply close to 222,000 metric tonnes of rice to the state, the newspaper reported.

However, just one day after FCI agreed to the supply, it received orders from the Union Ministry of Consumer Affairs, Food and Public Distribution that prevented FCI from selling the rice to state governments. Thereafter, the FCI cancelled the rice allocation to Karnataka.

The Union government appears to have taken the step to ensure adequate stocks to control the price of rice in the country. Moreover, since the Karnataka government was going to distribute rice to families free of cost, the government at the centre feared a similar demand could rise from other states. A situation the government would like to avoid with the upcoming state assembly elections, the IE report added.