Prices of rice may continue to go up, says govt

Local prices of rice may continue to go up, the govt said on Thursday, attributing the projected rise to low kharif production forecast and 11 per cent surge in export of non-basmati variants.

As on September 19, retail price of rice showed an increase of 0.24 per cent over the week, 2.46 per cent over the month and 8.67 per cent over the year, the govt said. On an average of five years, there is an increase of 15.14 per cent, it said.

The ministry had earlier informed that domestic rice production is estimated to declined by 6 per cent to 104.99 million tonnes in the 2002-23 kharif season.

The food ministry added that the recent changes in rice export rules “have helped keep a check on domestic prices” without reducing the availability for exports.

It may be noted that the government had in early September banned export of broken rice, besides imposing a 20 per cent export duty on non-basmati rice. These steps were taken to boost domestic supplies paddy crop acreage in this kharif season.

“The domestic prices of rice are showing increasing trend and it may continue to increase due to low production forecast by about 6 million tonnes of paddy and 11 per cent increase in export of non-basmati rice compared to corresponding period of last year,” the ministry said in its fact sheet.

Domestic broken rice price, which was Rs 16 per kg in the open market, has increased to about Rs 22 per kg in states, it said.

Poultry and animal husbandry farmers were impacted the most due to price hike in feed ingredients.

About 60-65 per cent inputs cost for poultry feed comes from broken rice.

“Any increase in prices of feedstock are reflected in price of poultry products like milk, egg, meat, etc adding to food inflation,” the ministry said.

As per data provided by the govt, in international markets, Indian non-basmati rice is selling at around Rs 28-29 per kilogram. This is higher than the domestic price. An export duty of 20 per cent on non-basmati rice would lead to lowering of rice prices, it added.

The ministry further said the ban on export of broken rice, which is used in poultry feed, was imposed following a rise in the grain’s exports in recent months, which had put pressure on domestic prices.

Global demand for broken rice has risen due to geo-political scenario which has impacted price movement of commodities including those related to animal feed, the govt said.

Over the past four years, export of broken rice has risen to 21.31 lakh tonnes in April-August this year from 0.51 lakh tonnes in the comparable period a year ago.