Hyderabad: Rice has become significantly costlier in Telangana in recent months, with prices rising faster than the national average. While experts say hoarding by private players is driving up prices, traders cite concerns over crop yields amid a possible El Niño impact.
In fact, as the Times of India cites, a policy paper has warned that global prices of rice could also spike by 30-50 per cent if El Niño-linked losses continue to be coupled with stockpiling.
Data from the Union Ministry of Consumer Affairs showed that while the national average increase between May and July was 3.33 per cent, the average retail price of rice in Telangana increased by 4.65 per cent during the same period.
Telangana’s average retail rice price during that period was Rs 52.67 per kg, which is nearly Rs 10 more per kg than the national average in July. This is true for almost all popular varieties, the report quotes rice traders as saying. The fine rice varieties are priced anywhere between Rs 54 and Rs 70 per kg.
El Nino or hoarding?
“Prices have certainly gone up. This is certainly the El Niño effect. The crop has been impacted. If the crop is good in the coming months, prices will come down,” said Chinnapu Reddy of the Telangana Rice Millers Association.
But production concerns cannot be the sole reason, said Samarendu Mohanty, former adviser to the International Commodity Institute and founding director of the Centre for Sustainable Agriculture and Development Studies, adding, “In states like Telangana, where paddy acreage is quite good, prices should not rise too much. The current increase is not because of supply disruption. Hoarding by private players is also contributing to the rise in prices.”
Global price surge likely
According to a policy paper by Professor Jayashankar Telangana Agricultural University (PJTAU), global rice prices
could surge by 30-50 per cent due to a combination of factors: geopolitical uncertainties, rising fertiliser and energy costs, and the threat of El Niño impacting rice-growing areas in Asia.
It said that there are three possible scenarios for the global rice market. In the best-case scenario, prices could rise by 10-20 per cent if production is stable and there is no panic buying. What is most likely to happen, however, is that prices could increase by 30-50 per cent because of moderate production losses and stockpiling. In the worst-case scenario, the study said, global prices could double due to export restrictions and panic buying.
