Rice Prices Likely To Zoom Up Following Cyclone Damages

Cyclone Michaung’s heavy downpour has exacerbated the existing challenges faced by Andhra Pradesh’s paddy farmers.Even before the cyclone, an underwhelming kharif season with scanty rainfall prevented planting in five lakh acres of paddy fields.Unfortunately, the subsequent drought-like conditions during the planting season parched crops in an additional 10-20% of the planted area, leaving the land cracked and dry in several districts. More than 100 mandals of the state were declared as drought-affected by the state government. The opposition parties have long been demanding the government to include more mandals in the drought-affected list.Adding to the farmers’ woes, the existing insurance schemes do not cover post-harvest losses like those incurred on harvested paddy stored in the fields. This leaves them anxiously awaiting compensation from the authorities.This double whammy of drought followed by torrential rains devastated the paddy harvest, which may significantly impact the yield and productivity. This, in turn, is likely to exert upward pressure on rice prices in the coming months. This convergence of factors will drive up the rice prices, becoming an additional burden for the consumers.The fine quality rice is already being sold over Rs 60-65 a kilogram in cities like Visakhapatnam, Vijayawada, Tirupati, Guntur, etc. This may see an upward revision of Rs 5-10 in the coming few months.

Several traders and rice millers claim that they are witnessing a depletion in fine quality rice stocks for the last one year. A relatively new trend has emerged in Andhra Pradesh where several individuals are selling rice obtained from government ration depots at Rs 15-20 a kilogram on the black market. These individuals then again use the proceeds to purchase higher-quality rice for personal consumption.

Ex-president of AP Rice Millers Association A Rama Krishna Reddy said that the cyclone damages on the heels of drought conditions is expected to push the rice prices northwards.“The discoloured paddy due to submergence in floodwater for extended periods of time will not fetch high prices for the farmers. On the other hand, the increased demand for good quality rice will increase the prices as market dynamics will always depend on demand and supply,” said Rama Krishna Reddy.

The state government is currently offering about Rs 2,200 per quintal for the fine quality paddy, while the others are procured at somewhat lower prices based on the variety. Even though the government directed the rice millers to procure all the discoloured and wet paddy from the cyclone, the millers in several parts of the state are reluctant to take it, claiming excessive moisturiser.

M Satti Babu, a rice mill owner cum trader from Kakinada district, said that there has been a general scarcity of fine quality paddy for the last one year. “The rice prices have got a near 10% increase in the last six months. However, despite the reported drought conditions, some farmers reported increased productivity this year. In the open market, a 75-kg paddy A-quality is bought at over Rs 2500,” said Satti Babu.

Explaining about the paddy damage in Anakapalli district, agriculture department joint director Mohan Rao said that as per the initial estimates, damage was done to paddy in about 30,000 acres in the district. “Due to the decreased rainfall, paddy plantations were not completed in about 30,000 acres out of the targeted 1.3 lakh acres in the district. The rainwater has receded for the most part in the affected fields. We will arrive at the final numbers of the damage based on the field-level enumeration,” said Mohan Rao.

This article has been republished from The Times of India

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