Rice prices surge on Bangladesh purchases, up over 10% in West Bengal

Rice prices have begun to rise across the country with the surge being sharp in West Bengal, where they have increased by 10-15 per cent in the past month. The surge, higher than wheat and atta (wheat flour) is on account of demand from Bangladesh primarily, though panic purchases in some quarters have also aided the trend.

The price of the common variety ( Swarna) has increased by ₹2 a kg to ₹25-27 this year against ₹23-25 in the year-ago period. The price of the premium Miniket has increased by nearly ₹3-5 to ₹41-42 this year against ₹37-38 last year.

Bangladesh had recently reduced import duty and tariffs on rice from 62.5 per cent to 25 per cent. The lower production of rice in Bangladesh has also pushed them to allow imports earlier than usual this year. Dhaka has also banned exports of all types of rice, heating up the market further.

Retail price

According to Suraj Agrawal, Chief Executive Officer, Tirupati Agri Trade, Bangladesh usually starts importing by September-October, but this year, they have already started importing since June-end or early July.

Nationally, the weighted average modal price (the rate at which most trades take place) has dropped to ₹2,901 a quintal from ₹2,962 a month ago. But in West Bengal, the weighted average modal price has increased to ₹3,093 from ₹2,921 a month ago.

But rice prices have increased in retail outlets across the country. Department of Consumer Affairs data show rice prices in retail outlets have increased to ₹36.62 a kg (₹3,183.18 a quintal in wholesale outlets) from ₹36.33 (₹3,153.92) a month ago. The increase in the cereal’s price is 0.80 per cent month-on-month, higher than 0.53 per cent for wheat and 0.35 per cent for atta.

India exported close to 16.23 lakh tonnes of non-basmati rice to Bangladesh in 2021-22, valued at around ₹4,541 crore, according to Director-General of Commercial Intelligence and Statistics data. This is a sharp jump of 78 per cent compared with the export of 9.11 lakh tonnes (valued at ₹2,552 crore) in 2020-21. West Bengal, Bihar and Uttar Pradesh are the key States from where rice is exported to Bangladesh.

Adverse weather

“This year Bangladesh has had a lower crop due to adverse weather conditions and availability of wheat is also scarce. So this has pushed up demand for rice. Prices of both common variety and Miniket have witnessed a sharp jump over the last one month,” Agrawal told BusinessLine.

Demand for rice has been steady across the country on the back of fears over a decline in production across some of the key growing regions, said a mill owner.

Trade analysts said panic purchases are being made by some exporters, who are concerned that the cereal’s shipments may be banned like wheat in case any problem with kharif cultivation. “While the demand is high, uneven rains have impacted production and this has led to a panic about a possible shortfall in the system. This has pushed up prices,” the mill owner said.

Published on

July 19, 2022

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