Rice prices in South shoot up by Rs 4 a kg

A serious shortage in the supply of both paddy and rice has triggered off steep rise in the prices of the grain in South, especially in Kerala.

The prices of sorted and boiled rice have appreciated by Rs 2-3 a kg, taking the average prices to Rs 17 in the wholesale market in the last 4-5 weeks.

The prices of Jaya, a common rice variety, have risen by Rs 2.50-3 a kg to Rs 17.20 -17.40 a kg. The prices of un-boiled rice have gone up by Rs 3-4 a kg to Rs 15.

According to leading rice traders of the state, such a steep rise was uncommon as for the last 10-12 months prices have remained almost stagnant.

K K Karnnan, managing director, Nirapara brand rice, and president, All Kerala Rice Mill Owners Association, said increased paddy prices had badly hit the company's margins.

"We cannot raise the prices of our products in proportion to the paddy prices, as we might lose our customers. Therefore, our margins are taking the beating," he said.

In the last three-four months, there has been a serious shortage of paddy in states such as Karnataka, Andhra Pradesh and Gujarat. The average prices of paddy have increased from Rs 850-900 a quintal to Rs 1,100 in a few weeks.

Even at higher prices paddy is not available for processing. During last season, average prices were hovering around Rs 700 and there was regular supply for the processing industry.

Karnnan said that paddy supply had dropped by 60-70 per cent and it was very difficult for them to fulfil the retailers' demand for branded rice.

The increase in the support price of paddy to Rs 900 a quintal has led to stocking of paddy in Kerala, which has badly affected availability of the same.

Kerala produces around 30 per cent of the state's paddy requirement as a major chunk of area under paddy cultivation has been converted into residential plots and shrimp farms.

Shortage of railway wagons has also hit the movement of rice and paddy and the supply through railways has dropped by 40-50 per cent in the last 3-4 months.

Meanwhile, the Kerala government has initiated several steps to regulate the prices. These include opening of exclusive rice shops that sell various rice varieties at an average price of Rs 14 a kg. In spite of these efforts, the prices continue to move northward.

Meanwhile, the state's civil supplies minister C Divakaran's statement that if there was no rice, people of Kerala should shift to other food items such as milk, eggs and chicken, has evoked angry responses from opposition parties.