Agri Business

Bengal sees rapid rise in rice prices

Abhishek Law Shobha Roy /Abhishek Law Kolkata | Updated on April 03, 2020

About 50-60 per cent of rice mills across the State have been closed down due to labour shortage   -  M_Moorthy

Prices of rice, which is the staple diet of the people of Bengal, has increased by nearly ₹2-3 a kg in the past one week on the back of sudden spurt in demand and an anticipated short supply following closure of a majority of rice mills in the State.

Price of common variety (Swarna) rice has increased to ₹26-27 a kg at mill end, as against ₹23-24 about ten days ago. In the retail market, prices have gone up by nearly ₹3-5 a kg with Swarna fetching close to ₹30 a kg, as against ₹26-27 a kg some days ago. The market is anticipating another 5-10 per cent rise in prices in the days to come as supplies remain tight.

Mills closed

About 50-60 per cent of the mills across various districts have been forced to close down due to labour shortage as a majority of workers employed in these mills have gone back to their villages due to the pandemic scare. This has impacted production of rice from paddy at a time when consumption has nearly doubled.

“People have been stocking up more rice than their usual consumption due to the uncertainty over the extent of lockdown. The lower consumption of fish and meat during the lockdown phase has also led to a spurt in demand for rice, leading to higher prices,” Debnath Mondal, Chairman, Bengal Rice Mils’ Association, told BusinessLine.

According to sources, the average daily consumption of rice in Bengal is estimated to be close to 4,000 tonnes. This surged to as high as 7,000-8,000 tonnes a day when the lockdown was announced as people were stocking up supplies.

Mills currently functioning are also incurring losses as there is hardly any market for the byproducts of paddy such as rice bran, husk, and broken rice. Nearly 60 per cent of the paddy can be converted into rice and the remaining comes out as byproducts and is used in making oil and feed for cattle and poultry, etc.

“Most of these mills that use our byproducts are closed so there is hardly any market for them now. Though the price of rice has increased at mill end, this is not sufficient to offset the losses. So there is likely to be further increase in rice prices,” an owner of a mill in Hooghly district said.

Arrivals from other States

While closure of rice mills in Bengal have impacted supplies on one hand, arrival of some variants such as raw rice from Bihar and basmati from Punjab and Haryana have been hit by logistics issues.

“Trucks carrying the rice have been stuck at various points as there is a huge lined-up of trucks. This is impacting supplies in the market,” said Suraj Agarwal, CEO, Tirupati Agri Trade.

A number of shopkeepers BusinessLine spoke to also complained about poor availability of the common variety in the market. While wholesale prices have increased, shopkeepers are also shelling out more on transport costs in the absence of vehicle arrangements by suppliers. This will also be passed on to consumers.

Even while some of the mills are operating, they are unsure about the viability of operations after some days because they fear the stocks will soon run out.

Farm labour shortage

Farmers are worried that harvesting (of boro paddy) would be delayed because of shortage of farm labourers.

West Bengal produces about 15-16 million tonnes of paddy each year across the three seasons; that include aus, aman and boro. The kharif paddy (aus and aman) output accounts for about 70 per cent of the total production in the State.

“This is a crucial time……We have to ensure that pesticides and manure is given to the crop so that we can begin harvesting by the second week of April. However, there are hardly any labourers on the fields. We are not sure if we could commence harvesting work on time,” said Abdar Rezzak, a 55-year old paddy farmer in Burdwan district.

Published on April 03, 2020

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