Some mosques express their readiness to receive the
equivalent cost of Zakaat-ul Fitr from people in order
to distribute it to the needy on their behalf in the form
of commodities such as rice, flour, etc. Is this
practice alright?

Since that it is intended that they would be purchasing and
distributing those commodities to those who are in need of [the
commodities] on their behalf, then it is alright and they will be
getting the due reward, in shaa’ Allaah.