Rice Prices Rise Despite High Government Stocks

New Delhi: Although the Food Corporation of India (FCI)—an agency under the central government—holds massive stocks of rice, prices for premium-quality rice continue to firm up. The harvesting of the new paddy crop is set to begin soon. Government procurement of paddy has already been approved to start on September 29 in Haryana, while in Punjab, it is scheduled to commence tomorrow, October 1.

The President of the Indian Rice Exporters Federation states that factors such as the impact of El Niño, a reduction in cultivation area, a shortage of premium rice, and export performance are driving the price rise. Not only are stocks of high-quality rice running low in South India, but the area under paddy cultivation has also shrunk in Karnataka, Telangana, Andhra Pradesh, and Tamil Nadu. Additionally, deficient monsoon rainfall in these regions raises concerns about the impact on paddy yields. Paddy acreage in Maharashtra, Uttar Pradesh, Madhya Pradesh, and Jharkhand has also lagged behind last year's figures.

Global demand for 'A' grade rice varieties, including Sona Masuri and Ponni, remains strong. These varieties are highly popular among South Indians, leading to regular and significant imports. The market is currently in the off-season for paddy and rice supplies. However, arrivals of Basmati paddy have begun to rise rapidly in North India, particularly in Punjab, Haryana, and Western Uttar Pradesh.

Prices for high-quality rice typically remain high during this period. The FCI primarily holds stocks of common-grade rice. Meanwhile, prices for high-quality paddy and rice produced in Chhattisgarh and other states are also firming up. Some easing in prices may occur only after the arrival of the new crop picks up significant momentum.