Rice Prices Decrease with Arrival of Rabi Crop in the Market
Published on: February 21, 2024.
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Price Drop in Rice Makes Staple Food More Affordable for Indian Households
In the past month, prices of all types of rice in India have fallen by up to 10%. This drop is attributed to an increase in the supply of rice in the market and government measures. The decrease in prices is good news for the government, especially with the upcoming general elections. Non-basmati rice prices have fallen by up to 7%, while basmati rice prices have seen a steeper decline of 10%.
The reduction in prices is due to the gradual arrival of the rabi crop from Telangana, Odisha, and Tamil Nadu in the market. Trade sources have noted that the prices of non-basmati rice have fallen. Sona Masoori rice, a popular non-basmati variety consumed by India’s middle-class families, is now available at Rs 58 per kg in the retail market, compared to Rs 62 per kg last month. Traders predict that the price may even fall below Rs 55 by the end of March when arrivals increase.
Prices have fallen in the last week to 10 days since the government made it mandatory for all stakeholders in the rice trade to declare their stock limit every Friday. Rice mills in Telangana are currently burdened with rabi paddy from the previous season as the Centre refused to procure the summer season rice due to lack of demand. The state, being the largest producer of rabi rice crop, currently has a stock of approximately 3.5 million tonnes of paddy from the 2022-23 season.
States like Kerala and Tamil Nadu, which used to buy parboiled rice from Telangana, are no longer making purchases as their local production has increased. Prices of non-basmati rice are expected to continue falling. According to BV Krishna Rao, President of the Rice Exporters’ Association of India, there is now ample supply of Sona Masoori rice in the market, leading to the decrease in prices.
The decline in prices has been more significant in the basmati rice category. Indian basmati rice is facing tough competition from the basmati rice cultivated in Pakistan, as Pakistan has had a bumper crop this year. Global buyers are leaning towards Pakistan due to this. Additionally, Indian exporters had purchased large quantities of basmati rice from farmers after the government lowered the minimum export price to $950 per tonne. Now, global buyers are negotiating prices with exporters, resulting in a decrease in export and domestic prices.
For instance, prices of the most common variety of basmati rice, Pusa1121, have fallen from Rs 104 to Rs 92-93 per kg in January.
In conclusion, the drop in rice prices in India is attributed to increased supply and government measures. Non-basmati rice has become more affordable, and basmati rice prices have seen a steeper decline due to competition from Pakistan and lower export prices.
Source: [The Economic Times](https://m.economictimes.com)
