Deficient rains may push up rice prices: Assocham

“Though the government estimates kharif rice production at 90.61 MMT, this is unlikely to be achieved due to severe deficit rains in Punjab, Haryana, Uttar Pradesh, Bihar, Maharashtra and Karnataka and the best that could be achieved is 89 MMT,” it said. The study said that rice stocks have declined in last three years from 24.59 million tonnes in 2012 to 13.89 million tonnes (plus unlimited paddy 3.61 tonnes) in stocks at present.

“Increasing export outgo on account of PDS (Public Distribution System) and other welfare schemes will continue to weigh on availability in the open market. Unless the government is able to handle the situation prudently, depleting stocks will soon reflect on the open market prices,” said Assocham.

It said that given the huge domestic demand for rice, the government needs to closely monitor both prices and stock situation.

Already a section of global exporting community is evaluating possibility of India entering international market for import of these commodities from 2017, if urgent steps are not taken to augment supplies, it said.

“The consequences of deficient 2015 monsoon are likely to be far-reaching. Besides, slowing down the economy considerably and accentuating inflationary pressure coupled with shortages of essential food items across the country, it could also lead to dependence on import of essential food items. Already India is heavily short on vegetable oils and pulses and a recurring monsoon failure might push the country into a tight corner in respect of rice and sugar among others,” said Assocham.

However, the report contradicts the current price trend in the market, where wholesale prices of non-basmati prices are ruling down at Rs 25 per kg as against Rs 30 per kg last year. Similarly, wholesale rates of premium basmati rice have declined sharply by about 30 per cent to Rs 44-45 per kg at present from Rs 62-65 per kg last season, as per traders.