OfBusiness Rice Dailies | 7th July 2023

Price

• Rice prices have increased due to the high demand from domestic and export markets.
• Basmati rice is being purchased at a rate of 3150/3200 per quintal in ports like Gandhi Dham and Visakhapatnam, as there is an increased demand for long-grain rice, including from countries like Bangladesh, Nepal, the UAE, and the USA.
• The price of the new variety of rice, 1509 Sella, has risen from 400/500 rupees per quintal to 6400/6500 rupees per quintal.

Demand and Supply

• There is a significant demand for rice in both domestic and international markets.
• Buyers from Bangladesh, Nepal, and Gulf countries are procuring rice from markets in Bihar and port cities like Gandhi Dham and Visakhapatnam.
• The demand for long-grain rice, including Basmati rice, has increased, leading to higher prices.
• However, the supply of rice in domestic markets has been affected due to reduced trading activities in local mandis (markets) as the government has implemented a scheme for free distribution of rice, ensuring easy availability for consumers.
• The bumper harvest of rice in Uttar Pradesh has resulted in an excess supply of fine rice varieties, causing a decline in prices.

News

• The government’s initiative of free rice distribution has impacted trading in local markets, resulting in reduced business activities.
• Rice prices are set to increase due to adverse weather conditions, India’s agricultural policies, and declining global supplies. With global rice prices already at an 11-year high, the impact on food prices is expected to be significant.
• The Food Corporation of India (FCI) had minimal rice sales in the first OMSS auction (170 tonnes out of 3.86 lakh tonnes offered), while wheat offtake increased to 32% in the second round.

OFB’s Opinion

• It is worth considering the potential effects of the government’s initiative to provide free rice, as it seems to have had an impact on trading in local markets, leading to a decline in business activities.
• The rice market, influenced by both international demand and domestic supply dynamics, tends to experience fluctuating prices across various rice varieties.