Food Minister Piyush Goyal will hold a meeting with stakeholders – traders, processors and exporters - on January 15 to assess rice supply situation in the country. The retail prices of rice have been consistently increasing with the annual inflation rate of 12% since last two years. Government plans to deal this by selling rice from its stocks and asking retailers to reduce their ‘sharply increased’ margin of profit. The domestic prices of rise are high despite good Kharif crop, ample stocks with FCI and regulations on exports. Sanjeev Chopra, Secretary, Department of Food and Public Distribution had conducted a meeting with the representative of rice industry on December 18, 2023. The reports of a sharp increase in the margins being availed by wholesalers and retailers were cited in that meeting while asking the leading rice industry associations to reduce the price. The Hitavada talked to industry insiders from the city to understand the gap between Government interventions and ground situation. Although retailers might be keeping high margin, Government can hardly do anything to curb it.

 

Even FCI stocks will not help with retail inflation of rice. Because FCI has stocks of only thick variety of rice and not the slender variety which is by-and-large preferred, said Gopal Bhaiya, owner, MKB Foods Pvt Ltd, a rice mill owner. Santoshkumar Agarwal, President, The Wholesale Grain and Seeds Merchants Association, Nagpur believes these meetings are futile. The high prices of rice are the result of high prices of paddy. The Government inflated the paddy prices ahead of State elections in Chhattisgarh and Madhya Pradesh. The paddy that was being sold for Rs 1,800 per quintal to Rs 2,000 per quintal in these States, surged up to Rs 3,500 per quintal.

 

“Why wouldn’t rice get expensive”, asks Agarwal. “The high margins cited by the Union Government doesn’t exists at least in wholesale market of Nagpur. Traders are overburdened with taxes and working at meagre margins already”, said Atul Senad, Director, Agricultural Produce Market Committee, Nagpur. He claims that in the hinterlands like Vidarbha, effective profit margins of retailers are low. While ruling out any drop in rice prices due to Government interventions, the traders at Nagpur caution that rice prices may in fact increase as lesser rabi yields are being anticipated in Andhra Pradesh and Karnataka.