Govt to intervene in retail rice market to curb prices
By Sandip Das
As the retail inflation in rice continues to be in double digits for more than a year, the government is considering several measures including sale of grain from its stocks, as well as asking retailers to reduce “high margins.”
To review rice supply situation in the country, food minister Piyush Goyal will hold a meeting of stakeholders – processors, exporters and traders — on January 15.
“We are discussing market interventions on the lines of Bharat dal and Bharat atta schemes launched earlier for pulses and wheat to curb retail rice prices. Stocks may be offloaded from the surplus rice stocks held by the Food Corporation of India (FCI), besides taking steps to curb high margins made by retailers,” a food ministry official told FE.
At present, the government is selling chana dal and atta (flour) at subsidised rate of Rs 60/kg and Rs 27.5/kg through farmers’ cooperative Nafed and NCCF and Kendriya Bhandars stores under Bharat Dal and Bharat Atta initiatives.
The official said that the domestic prices of rice are at elevated levels despite a ‘good crop’ this kharif, ample stocks with FCI in the pipeline and various restrictions and duties imposed on grain exports.
In the meeting with the rice industry next week, the official said the factors including lukewarm response to subsidised rice sold by the FCI by traders as well as the review supply situation will be discussed.
Last month the food ministry stated that there are reports of a sharp increase in the margins being availed by wholesalers and retailers which needs to be tempered.
The rice industry needs to ensure that the prices in the domestic market need to be brought down to optimal levels and efforts at ‘profiteering are dealt with strictly,’ according to a food ministry statement.
The FCI has sold only 0.14 million tonne (MT) of rice under open market sale scheme till last week against allotted 5 MT through weekly e-auction commenced in July. The FCI has been selling rice under OMSS at Rs 2900/quintal, below the economic cost of grain for 2022-23 at Rs 3,537/quintal.
On January 1, FCI had rice of 18.05 million MT rice, 33.27 MT of rice is yet to be receivable from millers. The grain stock is against a buffer of 7.61 MT.
Retail inflation in rice has been in double digit since October 2022 and rice price rose by 11.81% in November, 2023 on year. According to the department of consumer affairs, modal retail prices of rice rose to Rs 40/kg on Friday, an increase of 18% on year. The ‘cereals and products’ category has 12.35% weightage in consumer price index.
Last year, the government had banned non-basmati white rice exports, however shipment of rice for meeting the food security needs of developing countries was allowed. It also imposed 20% export duties on par-boiled rice to improve domestic supplies.
In the 2022-23 crop year (July-June), rice production was estimated at record 135.75 MT. In the first advance estimate of foodgrain production for crop year 2023-24, rice output for Kharif crop out put is projected 106.3 MT, marginally higher than last year. Kharif crops accounts for more than 80% of total rice output.
This article has been republished from The Financial Express.