News Capsule: New OMSS Policy to Boost 20% Ethanol Blending Target, Improve Utilisation of FCI's Old Rice Stocks
25-Jul-2026 09:59 AM
News Capsule: New OMSS Policy to Boost 20% Ethanol Blending Target, Improve Utilisation of FCI's Old Rice Stocks
★ Under the revised OMSS policy for the 2026-27 Ethanol Supply Year (ESY), the Government has allocated 7.2 million tonnes of rice along with an additional 5.5 million tonnes of 100% broken rice to ethanol distilleries, a move expected to support India's 20% ethanol blending target.
★ The policy will enable the use of FCI's old and lower-grade rice for ethanol production, helping reduce storage costs and improve inventory management. FCI currently holds a record 40.3 million tonnes of rice and paddy stocks.
★ Under the new norms, rice for ethanol production will be supplied at ₹2,320 per quintal until October 31, and ₹2,390 per quintal from November 1.
★ Trade experts believe the policy will reduce FCI's storage burden, improve price transparency through e-auctions, and provide long-term feedstock security for the ethanol industry.
★ However, if a significant volume of rice is diverted to ethanol production, it could reduce the availability of non-basmati rice for exports. This may affect India's competitiveness in price-sensitive markets such as Africa and Southeast Asia, while creating opportunities for exporters from Pakistan, Vietnam, and Myanmar.
★ The government has clarified that OMSS allocations will be made only after ensuring adequate stocks for the Public Distribution System (PDS), buffer norms, and strategic reserves, aiming to maintain a balance between food security and ethanol production.