- India’s rice procurement rises by 6% y-o-y
- Higher stocks may drive aggressive disposal
India’s rice procurement remains firm in the 2025-26 marketing season, reflecting strong production and sustained government buying. However, with stocks building up beyond buffer requirements, the Centre may increasingly rely on open market sales and ethanol diversion to manage the surplus.
Procurement maintains steady pace
Government rice procurement during October 2025 to April 2026 has reached 49.86 million tonnes (mnt), marking a 6% y-o-y increase compared to 47.02 mnt in the same period last season. This includes around 1.21 mnt from the rabi (winter-grown) crop, while procurement in April alone stood at over 1.4 mnt, indicating continued inflows despite seasonal tapering in arrivals. The government has set a total procurement target of 56.66 mnt for the 2025-26 season (October–September), comprising, 48.7 mnt from the kharif crop , 7.96 mnt from the rabi crop. In comparison, total procurement in 2024-25 stood at 54.52 mnt, suggesting that the current season could surpass last year’s levels if the pace sustains.
Rabi procurement led by southern states
For the ongoing rabi marketing season (April–September), procurement remains relatively limited and region-specific. The Centre has outlined indicative targets led by southern and eastern states: Telangana: up to 3.5 mnt, Tamil Nadu: 1.4 mnt, Odisha: 1.1 mnt and Andhra Pradesh: 1 mnt. This underscores the secondary contribution of rabi rice to total procurement, which continues to be dominated by the kharif crop.
Record liquidation signals surplus pressure
The higher procurement has significantly increased rice stocks in the central pool, raising concerns over storage capacity and carrying costs. As a result, the government has already accelerated disposal. In 2025-26 so far, total rice sales from official reserves have reached a record 10.8 mnt compared to 4.53 mnt in 2024-25. Of this, around 5.2 mnt has been supplied to distilleries for ethanol production and the remaining volumes have been released through open market sales and allocations to states. This reflects a clear policy push towards alternative demand channels, particularly ethanol blending, to absorb excess stocks.
Outlook
While strong procurement supports mandi prices during peak arrivals, aggressive liquidation especially through open market sales—could exert downward pressure on domestic rice prices, particularly in the non-basmati segment. However, sustained diversion towards ethanol production may help partially offset the surplus, offering a supportive demand channel.
Going forward, market direction will depend on pace and scale of government stock liquidation, policy support for ethanol blending, progress of the upcoming monsoon and kharif sowing. With procurement trending higher and stocks already elevated, India is likely to remain in a surplus rice situation, requiring calibrated policy intervention to maintain price stability without overburdening storage systems.
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