The Food Corporation of India has sold 23.42 lakh tonnes of rice for ethanol production in the current financial year up to July 31, the government informed Parliament on Tuesday.
At the same time, authorities have detected two cases where rice meant for ethanol production was allegedly diverted from its intended use. Minister of State for Consumer Affairs, Food and Public Distribution Nimuben Jayantibhai Bambhaniya shared the details in a written reply in the Rajya Sabha.
The latest figures show that rice supplied for ethanol production continues to remain significantly higher than in previous years.
The FCI had sold 52.22 lakh tonnes of rice for ethanol production in 2025-26. The corresponding figure was 8.96 lakh tonnes in 2023-24 and just 2.36 lakh tonnes in 2024-25.
While the government said there were no reported instances of diversion of FCI rice supplied to distilleries for ethanol production during the previous three years, two cases have been detected in FY2026-27.
The cases were reported in Uttar Pradesh and Madhya Pradesh.
According to the minister, government agencies detected irregularities in the movement of rice consignments linked to two distilleries. State food departments subsequently took action, while FCI stopped further allocation of rice to the concerned distilleries.
The government said prompt action has been initiated in both cases. The development highlights the importance of monitoring subsidised or government-controlled foodgrain supplies once they are allocated for industrial purposes such as ethanol production.
The data also showed that the government was holding a substantial rice stock.
As of July 1, 2026, the government had 403.11 lakh tonnes of rice in its stocks. This was nearly three times the prescribed buffer requirement of 135.40 lakh tonnes for the period. Maintaining such large stocks comes with a significant financial cost.
The government spent Rs 10,171.71 crore on carrying rice buffer stocks in 2024-25, according to audited figures presented in Parliament. This was more than three times the Rs 3,143.89 crore spent in 2020-21. The carrying cost had also risen to Rs 5,831.27 crore in 2023-24.
The government also reported strong paddy procurement for the Kharif Marketing Season 2025-26. As of August 2, FCI and other government agencies had procured 849.20 lakh tonnes of paddy.
The latest data, therefore, points to a combination of high government rice stocks, rising allocation of rice for ethanol production and continued large-scale paddy procurement.
At the same time, the two diversion cases in Uttar Pradesh and Madhya Pradesh have prompted action against the concerned distilleries, with FCI discontinuing further rice allocation to them.
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