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In a first govt directs rice sector to cut domestic prices

Sufficient good quality rice is available under the OMSS to traders, the govt said

The annual inflation rate of rice has been near 12% for the past two years which is a cause of concern, the food ministry said. (Reuters)

New Delhi: The Union government on Monday directed rice industry associations to ensure domestic prices of non-basmati rice are brought down to optimal levels and profiteering is dealt with strictly.

“The rice industry needs to ensure that the prices in the domestic market need to be brought down to optimal levels and efforts at profiteering dealt with strictly,” the government said in an official statement on Monday.

The statement came after food secretary Sanjeev Chopra convened a meeting with the top representatives of the rice processing industry, to review the domestic price scenario of non-basmati rice on Monday.

Sufficient stock of good quality rice is available which is being offered under the open market sales scheme (OMSS) at ₹29 per kg to traders and processors, according to the government.

The directive has been issued after the food ministry came to know that rice is sold at ₹43 per kg to ₹50 per kg in the retail market.

The government in July had banned exports of non-basmati white rice and imposed a 20% export duty on parboiled rice to improve domestic availability and affordability of the commodity. Besides, the Centre set a minimum export price of $950 per tonne for basmati in October to discourage export of the premier rice variety.

“It was discussed in the meeting that the domestic prices of rice are increasing despite a good crop this kharif, ample stocks with Food Corporation of India (FCI) and in the pipeline. The prices have increased despite various regulations in place on rice exports,” the government statement said.

The food ministry said annual inflation rate of rice is near 12% for the past two years which is a cause of concern.

The need to quickly pass on the benefit of lower prices to end consumers was discussed at the meeting.

Leading associations have been advised to tell their members to ensure that the retail price of rise is reduced forthwith.

“There are reports of a sharp increase in the margins being availed by wholesalers and retailers which needs to be tempered,” the statement said.

Besides, it was suggested that where there exists a wide gap between the MRP and actual retail price, the same needs to be brought down to a realistic level in order to safeguard the interest of the consumers, it said.

Disagreeing with the government’s diktat, grain merchant Naresh Gupta, who was also in the meeting, said, “We have requested the government to reduce the reserve price of rice to ₹2700 per quintal as the rice procured through OMSS has only a few takers.”

“The government needs to keep a tab on retail rice sellers as they are selling the rice at ₹43 per kg to ₹53 per kg after levying Goods and Services Tax (GST) on the food item,” said Gupta, who is president of Delhi Grain Merchant Association (DGMA).

India has been supplying rice to its strategic partners in Asia and Africa since the export ban was imposed on broken variety and non-basmati white rice in September 2022 and July 2023, respectively. The export ban is meant to keep prices in check.

In recent months the government has also cleared exports of 2.77 million tonnes (mt) of non-basmati white rice to 14 key Asian and African nations, including Singapore, Nepal, Malaysia and the Philippines.

https://www.livemint.com/industry/agriculture/in-a-first-govt-directs-rice-sector-to-cut-domestic-prices-11702917793634.html QR Code

Published Date: December 19, 2023

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