The Hindu : Tamil Nadu / Chennai News : Rice prices on the rise

Online edition of India's National Newspaper
Friday, Dec 21, 2007
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Tamil Nadu

Tamil Nadu - Chennai

Rice prices on the rise

S. Vydhianathan

CHENNAI: Rice prices in the State are on the rise due to export to Sri Lanka and movement restrictions by the Andhra Pradesh Government.

The price of “Sona” variety, which was Rs.17 a kg till last month, is now selling at Rs.20 per kg at the wholesale market. In retail, it is one rupee more. Fresh varieties, selling at Rs.14 a kg, have also registered an increase of Rs.1.50 a kg.

Wholesale traders here said exporters purchased a bulk of the quantity from the market as the profit margin in export was higher compared to that in retail sales.

The other factor was the movement restriction by the Andhra Pradesh Government. Amara Visweswara Rao of the Tamil Nadu Foodgrains Merchants Association said the Andhra Pradesh Government had allowed mill owners to move rice to other States, including Tamil Nadu, only till December 30. From the New Year onwards, the movement would be restricted. As the Government was planning to supply rice at subsidised prices to its card holders, it was looking to build a substantial stock, to the tune of 37 lakh tonnes.

Wholesale and retail traders in Tamil Nadu did not build up stock in the last two months apprehending a fall in prices. This also contributed to the increase in prices, he added.

An increase in the open market price would normally lead to more than usual offtake of rice at the Public Distribution System. At present, only 40 to 45 per cent of the 1.84 crore cardholders purchased PDS rice. The percentage could increase in the coming weeks. But the State had sufficient stock to meet a possible increase in demand. The Tamil Nadu Civil Supplies Corporation has not received paddy in the current kuruvai season, as against 3.29 lakh tonnes in the previous season. Corporation officials said delta farmers did not raise kuruvai this time as water from the Mettur reservoir was not released on the scheduled date of June 12. However, it would be compensated in the samba season as there would be more arrivals.

A majority of farmers would sell their produce to the corporation as the minimum support price for paddy had increased from Rs.650 per quintal to Rs.825 per quintal for Grade A variety and Rs.620 to Rs.795 per quintal for the common variety. The corporation is expected to purchase about 16.5 lakh tonnes of samba paddy as against 12.78 lakh tonnes in the last season.

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