The Indian government, through the Food Corporation of India (FCI), has announced its Open Market Sales Scheme (OMSS) policy for the fiscal year 2026-27, setting key prices for rice and wheat sold from official reserves. Under the policy, rice for ethanol production will be sold at Rs 2,320/quintal until October 31, 2026, and Rs 2,390/quintal from November 1, while wheat for millers is priced at Rs 2,585/quintal for the URS category and Rs 2,600/quintal for FAQ category, according to the order issued on July 2, 2026. The policy, valid until June 30, 2027, notably does not specify quantities for most buyers, a cautious approach amid the threat of a super El Nino on India's foodgrain production.
Rice Pricing for Ethanol and State Governments
The selling rate of rice for distilleries to produce ethanol has been fixed at Rs 2,320/quintal until October 31 and Rs 2,390/quintal from November 1. The quantity of rice diverted for ethanol will be decided by a committee of ministers headed by Home Minister Amit Shah. The same rates apply to the sale of 48 lakh tonnes (lt) of rice to state governments and their corporations, as well as for community kitchens, without requiring participation in e-auction. However, state allocations are restricted to non-surplus states that require additional rice for their own schemes.
For central cooperative organizations — NAFED, NCCF, and Kendriya Bhandar — retailing under the 'Bharat' brand through stores, mobile vans, e-commerce platforms, and through big retail chains like Jio, rice is priced at Rs 2,480/quintal until October 31 and Rs 2,550/quintal from November 1. Small private traders, entrepreneurs, and individuals purchasing directly from FCI depots will pay Rs 2,890/quintal until October 31 and Rs 2,970/quintal from November 1.
Wheat Pricing for Millers and Other Buyers
Wheat rates have been fixed at Rs 2,585/quintal for the URS category and Rs 2,600/quintal for the FAQ category. While states, central cooperatives, and community kitchens receive wheat at fixed rates, private millers must purchase through e-auction at these reserve prices. The rates exclude transport costs, unlike rice which includes freight.
Quality Specifications and E-Auction Details
Following the Cabinet's approval on July 1, 2026 to lower the broken grain content in rice from 25% to 10%, the OMSS introduces a separate category for improved quality rice. Reserve prices for rice with 10% broken grain in e-auction for private parties are Rs 3,090/quintal until October 31 and Rs 3,180/quintal from November 1. For the standard 25% broken grain rice, reserve prices range from Rs 2,660-2,890/quintal until October 31 and Rs 2,740-2,970/quintal from November 1, varying by season. A minimum price of Rs 2,000/quintal has been set for 100% broken rice sold through e-auction.
| Category | Rate until Oct 31 (Rs/qtl) | Rate from Nov 1 (Rs/qtl) |
|---|---|---|
| Rice for ethanol distilleries & state governments | 2,320 | 2,390 |
| Rice for central cooperatives (Bharat brand) | 2,480 | 2,550 |
| Rice for small private traders (direct from FCI) | 2,890 | 2,970 |
| Rice (25% broken) e-auction reserve price range | 2,660-2,890 | 2,740-2,970 |
| Rice (10% broken) e-auction reserve price | 3,090 | 3,180 |
| 100% broken rice e-auction minimum price | 2,000 | 2,000 |
| Wheat URS category | 2,585 | 2,585 |
| Wheat FAQ category | 2,600 | 2,600 |
Implications for Ethanol Industry
Distillers have sought clarity on the pricing as the government order states that "for the purpose of supplying rice to ethanol distilleries for production of ethanol, old/broken rice should be utilised to the extent feasible." With broken rice priced at a minimum of Rs 2,000/quintal versus Rs 2,320/quintal for whole rice, distillers may face a choice between cheaper broken rice and the standard grade. The overall cautious quantity allocation, with no fixed volume for ethanol beyond state-level allocations, suggests the government is prioritizing food security amid the super El Nino risk.
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