Agri Business

Top-end rice prices on the boil

Vishwanath Kulkarni Bengaluru | Updated on June 17, 2019

Prices of preferred non-basmati rice varieties such as Sona Masuri and Kolam have risen by up to a fifth over the past few weeks on supply squeeze. This is mainly on account of reduced output in the previous cropping season in the drought-affected regions of eastern Karnataka and Vidarbha, where these varieties are mostly grown.

Also the tardy progress of southwest monsoon and concerns over projection of rainfall this year has aided the upward price trend with farmers and millers holding back their stocks, sources said.

Water crisis

Scanty rainfall last year coupled with lack of canal water for irrigation had impacted the paddy cultivation in districts such as Bellary, Koppal, Raichur and Yadgir in Eastern Karnataka.

“While the kharif transplantation was hit by the delay in release of water last year, farmers could not take up paddy cultivation during the rabi season as there was hardly any water in the canals,” said Chamras Malipatil, President of Karnataka Rajya Raitha Sangha - Hasiru Sene.

However, there’s no dearth of paddy stocks, he said. “Large farmers, stockists and millers are holding the stocks from previous crops,” Malipatil said, adding that newer storage techniques, including improved fumigation, are helping them hold the stocks.

Traditionally, the prices of the preferred varieties go up during this time of the year by about ₹2 per kg as the supply slows down. However, the extent of increase has more than doubled to around ₹5 per kg this year, says RC Lahoti, President, Bengaluru Wholesale Food Grain & Pulses Merchants’ Association.

Interestingly, the prices of other varieties such as Salem Idly has also gone up this year. “Prices may come down when the farmers start releasing the stocks in October-November,” Lahoti said.

Srikar Nag of Raichur Rice Mills Association, blamed the unplanned release of water for irrigation from the dams on the Tungabhadra and the Krishna rivers in the region for the shortfall in the crop. “Though the Tungabhadra dam got filled up, farmers could hardly take advantage of it due to the unplanned release of waters by the government,” said Nag.

Abysmal water levels

Water levels have reached the dead storage levels in Tungabhadra reservoir, where accumulation of silt has reduced the storage capacity. While the shortfall in last year’s kharif crop was estimated at 30-40 per cent, farmers could hardly harvest a tenth of the rabi crop, he said.

As a result, the supplies to the rice mills in Raichur have drastically reduced, forcing some mills to fetch paddy from neighbouring Andhra Pradesh, Nag said. Consecutive droughts in Nagpur region, where the Kolam variety is grown, has also hit the supplies of the premium variety, he added.

Vikram Shreeram of Shriya Rice Mills in Raichur said the price correction ranged between ₹2-6 per kg at the mill, depending on the varieties. The shortage of paddy has hit the processing of 70-odd rice mills in Raichur, which have reduced their production by half. “The 70-odd mills used to load about 400-500 tonnes of processed rice every day. Presently, we are not even loading 150-200 tonnes a day,” he added.

Srinivas Jayanthi, a trader in Bengaluru said the price fluctuation continues on a daily basis.

The steamed variety of sona masuri has seen the highest increase from around ₹33 a kg a month ago to aound ₹41-42 per kg now. “Prices could ease depending on the progress of monsoon,” he added.

India’s rice production for 2018-19 is seen at a record 115.63 million tonnes. Bulk of the paddy produced in India is that of common variety, which is used for supply of rice through the public distribution system. Trade sources estimate that about a fourth of rice produced in India is of premium variety including basmati. However, the production figures for preferred varieties like sona masuri and kolam were not readily available.

Published on June 17, 2019

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