The Hindu Business Line : Rice prices on a boil; market tight

New Delhi, Dec. 29 Domestically, rice prices have been on a boil. In the last couple of months, wholesale rates of parboiled PR-106 rice in Punjab mandis have shot up from Rs 1,350 to Rs 1,550 a quintal and from Rs 1,100 to RS 1,300 for raw rice.

“Everywhere, prices have increased between Rs 150 and Rs 200 a quintal. The market is very tight, as the stock in circulation with the private trade is estimated at only about 1.5 million tonnes (mt) against 3.5 mt two months back.

“Stocks in the Central pool, too, are about 2 mt below last year at this time, adding up to a total shortage of 4 mt”, trade sources said.

The Centre has, however, managed to procure 12 mt of rice so far during the current marketing season (October-September), which is almost equal to the corresponding figure for 2006-07. This has been possible mainly due to the bumper harvests in Punjab, Andhra Pradesh and Chhattisgarh, which contribute nearly two-thirds of the rice to the Central pool.

Moreover, heavy restrictions have been imposed on the private trade in these States during the current season. The AP Government has directed millers to not supply rice to any private trader or exporter till January 15.

The Chhattisgarh Government has similarly prevented any rice movement out of the State without the district officer concerned issuing a certificate to the mill specifically stating that it has supplied the mandatory 75 per cent levy quota.

In Punjab and Haryana, too, millers are required to deliver 75 per cent of their output as levy for the public distribution system.

“The Centre will, no doubt, procure the 25 mt-plus that was purchased last year. But the problem is the higher demand this time from the eastern region (eastern Uttar Pradesh, Bihar, West Bengal, Orissa and North-East), where the crop has been very poor. Add to this the tight position in wheat, which means greater pressure on rice in the coming months”, the sources added.