Govt to sell rice for ethanol at ₹2320/qtl, wheat to millers at ₹2585-2600/qtl
Food policy questions love scheme names, so grab this one. The Centre has announced its Open Market Sale Scheme, OMSS, for 2026-27. Under it, the Food Corporation of India will sell rice for ethanol production at 2,320 rupees per quintal and wheat to millers at around 2,585 to 2,600 rupees per quintal. Here's the thing, the government hasn't fixed total quantities this time, a cautious call because a super El Nino could hurt foodgrain output. Rice allocation for states has been capped at 48 lakh tonnes. This also links to India's Ethanol Blending Programme. Bottom line for the exam, remember OMSS 2026-27, the FCI, and the rice-to-ethanol connection.
According to the Open Market Sales Scheme for 2026-27, the rate of rice to be offered from the stock managed by the Food Corporation of India would include freight costs, whereas rates of wheat would are exclude transport costs.
The Centre has announced its policy on sale ofrice,wheatfrom the official reserves for 2026-27 without earmarking the quantity it intends to offer, which is seen as a cautious move amid the threat of a super El Nino on India’s foodgrain production. However, rice allocation for State governments and their agencies has been fixed at 48 lakh tonnes (lt).
According to the Open Market Sales Scheme (OMSS) policy for 2026-27, which is valid until June 30, 2027, the rate of rice to be offered from the stock managed by theFood Corporation of India (FCI), would include freight costs, whereas rates of wheat would exclude transport costs.
The selling rate of rice has been fixed at ₹2,320/quintal until October 31 and ₹2,390/quintal from November 1 for distilleries to produce ethanol. The quantity of rice for diversion towards ethanol will be decided by the committee of ministers, headed by Home Minister Amit Shah.
The same rates as for ethanol distilleries will also be applicable on sale of 48 lt of rice to State governments and their Corporations as well as for “community kitchens” without participating in e-auction, said the Order issued on July 2. However, the sale of rice to States is restricted only to non-surplus States, as they require additional rice for their own schemes.
Rice sold to Central Cooperative Organisations – NAFED/ NCCF/ Kendriya Bhandar – for retail sale under the ‘Bharat’ brand through their stores, mobile vans and e-commerce platforms, as well as through big retail chains like Jio will be priced at ₹2,480/quintal until October 31 and ₹2,550/quintal from November 1.
Rates of rice for small private traders, entrepreneurs, individuals to be sold directly from the FCI depot has been fixed at ₹2,890/quintal until October 31 and ₹2,970/quintal from November 1.
The reserve price of rice (with 25 per cent broken grain) in the e-auction for private parties and cooperatives has been fixed at ₹2,660-2,890/quintal until October 31 and ₹2,740-2,970/quintal from November 1. The rates would vary based on the rice procured in different seasons. However, older crops have been priced lower than newer crops, which is contrary to the open market rates where old rice costs more.
As the Cabinet on July 1 approved lowering the broken grain content in rice to 10 per cent from the current 25 per cent, the government has also introduced a separate category for the improved quality in the 2026-27 open sale policy. Accordingly, rice with 10 per cent broken grain content will have a reserve price of ₹3,090/quintal until October 31 and ₹3,180/quintal from November 1 in the e-auction for private parties.
Also, the government has fixed a minimum price of ₹2,000/quintal for the broken rice (100 per cent) category, which will be sold in the open market through e-auction to private parties.
Distillers said there needs to be clarity as the rice for ethanol has been fixed at ₹2,320/quintal, whereas the price of broken rice has been fixed at ₹2,000/quintal. The Government Order also says “for the purpose of supplying rice to ethanol distilleries for production of ethanol, old/broken rice should be utilised to the extent feasible.”
On the other hand, wheat rates have been fixed at ₹2,585/quintal for URS category and ₹2,600/quintal for FAQ category. While State and Central Cooperatives and community kitchens will be sold wheat at fixed rates, private millers would have to buy the wheat through e-auction at reserve prices.