Eating rice will be expensive! Due to less sowing, the production of rice is expected to be less by about 60-70 lakh tonnes.

Kharif season Rice prices may increase amid fears that rice production will be lower by about 60-70 lakh tonnes due to less sowing of paddy. In such a situation, the inflationary pressure on the already sluggish economy will increase. Retail inflation, which has been showing a declining trend for three months, started rising again and reached 7 per cent in August as prices of all food items, including cereals, rose. Along with this, the wholesale inflation was also under pressure from the prices of food items including food grains. Experts and analysts expect inflation to remain at higher levels in the times to come. At the same time, due to erratic rains in June-September and the south-west monsoon yet to depart, concerns have increased regarding the paddy crop.

Rice production stood at 1329 million tonnes

India’s rice production stood at 132.29 million tonnes in the 2021-22 crop year, up from 1243.7 million tonnes a year earlier. The Food Ministry has estimated that rice production in this year’s Kharif season will be less by 60-7 million tonnes. The kharif season accounts for about 85 per cent of the country’s total rice production. However, according to some experts, the reduction in rice production is not a cause for concern as the stock already with India is sufficient to meet the demand of the Public Distribution System (PDS). Besides, the government’s decision to ban the export of broken rice and levy 20 per cent duty on non-basmati exports will help in handling the situation.

Food price pressure rises

An article published in a recent bulletin of the Reserve Bank of India said that despite relief in fuel and basic components prices, food prices have been under pressure due to rising food prices. A report by the Finance Ministry on Saturday underlined the need for efficient management of agricultural commodity stocks in view of the low crop sown area during the Kharif season. However, it added that one has to avoid being anxious on the inflation front. NITI Aayog member Ramesh Chand said, “There is no immediate threat to domestic inflation due to rice. The increase in prices was due to increase in MSP and prices of other commodities like fertilizers and fuels. When the prices of which are increasing, there will definitely be some increase.

Date: 18-Sep-2022