Karnataka sees 50% increase in price of rice

Karnataka sees 50% increase in price of rice
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First Published: Tue, Mar 24 2009. 12 44 AM IST
Updated: Tue, Mar 24 2009. 12 44 AM IST
Bangalore / Hyderabad: The effect of the rising political temperatures in Andhra Pradesh, where state and national polls will be held simultaneously next month, is being felt in neighbouring Karnataka where the retail price of rice has shot up by 50% in some areas.
Supplies from Andhra Pradesh, India’s rice bowl, have dwindled over the past few months because of a ban on inter-state movement of the staple food introduced by the government in November. The ban was intended to check price rise during the elections.
Karnataka imports nearly a fifth of its rice requirement of 4.31 million tonnes (mt). The ban on rice movement in Andhra Pradesh has prompted traders from Tamil Nadu, Kerala and Maharashtra to pick stock from Karnataka, resulting in a shortage of the commodity there and an increase in its price.
“We are caught in between. There is less supply now, so prices have increased,” said Prasanna Kumar, secretary of the Bangalore Agricultural Produce Marketing Committee, or APMC, Merchants Association.
Andhra Pradesh ranks second among the rice producing states. It produced 11.87mt of rice in 2006-07, according to an official in the state’s agricultural department. West Bengal leads rice production in the country with 14.75mt in 2006-07, the last year for which authenticated numbers are available.
“I haven’t seen this (kind of price rise) in 12 years,” said Jayamalleshappa N., a rice trader in Ulsoor in downtown Bangalore. Rice millers in Andhra Pradesh, however, attribute the rise in prices of finer variety rice mainly to a change in eating habits.
“High disposable income levels across the state including rural areas has encouraged public to shift from stocky and coloured rice varieties to superfine and cleaner varieties over a period of time,” said Cholleti Rajender Reddy, a member of Andhra Pradesh Rice Millers’ Association. With the government offering a minimum support price of Rs930 per quintal for all the varieties, farmers refrain from selling their produce to rice mills and sell instead to traders whenever they get higher realizations, said Reddy, who runs Sri Venkateswara Rice Industries. But an Andhra Pradesh government official said production of better quality rice in the state has not kept pace with the rise in demand.
“We were successful in insulating our market to a large extent. While the superfine rice varieties in the neighbouring states range from Rs30-38 a kg, we were able to contain the prices in the range of Rs22-30 a kg. Further, the common variety rice is still available at some Rs16 a kg in our state,” said Sanjay Jaju, commissioner and principal secretary of food, civil supplies and consumer affairs in Andhra Pradesh.
Meanwhile, the government in Karnataka says the price of rice is coming down after it took steps to lift stocks from the Union government. “We have got over 20,000 tonnes of rice to be sold under PDS (public distribution system). Rice prices are coming down,” said Hartal Halappa, state food and civil supplies minister.
raghu.k@livemint.com
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First Published: Tue, Mar 24 2009. 12 44 AM IST