Staple spikes: Has an abnormal Kharif 2022 caused rice prices to rise

Rice prices are spiking across India, even in areas where it is the staple. This development comes even as the country has experienced an abnormal Kharif season, with uneven distribution of rainfall.

The cereal that forms the staple diet of over half of India’s population has become prohibitively expensive even in the country’s rice belt. For example, rice is being sold at Rs 58 per kilogram in Chennai and Rs 41 per kg in Kolkata.

The wholesale price of rice has increased by four per cent during the last one month. The price of rice has increased by 7.3 per cent, compared to last year.

The retail price of rice was Rs 37.94 per kg as on August 17, 2022, according to the Price Monitoring Cell of the Department of Consumer Affairs. The wholesale price of rice was Rs 3,295.24 per quintal.

The retail price was Rs 36.6 per kg and the wholesale price was Rs 3,167.18 per kg July 17, 2022. This means the retail price has increased by 3.09 per cent and the wholesale price by 4.04 per cent in a month.

The retail price of rice was Rs 35.61 per kg August 17 last year, which increased to Rs 37.73 (5.95 per cent higher) this year. The wholesale price has increased to Rs 3,295.26 per quintal from Rs 3,068.95 per quintal last year (7.37 per cent higher).

Bad Kharif

The abnormal distribution of rains in the current monsoon season has caused significant damage to the paddy crop.

Paddy had been sown on 30.98 million hectares (mha) as on August 12, 2022, according to Union agriculture ministry data. This figure was 35.36 mha at the same time last year.

Paddy has not been sown on 4.383 mha (12.40 per cent less) this year, as compared to last year. The total area under paddy in the country is about 39.7 mha.

That is, 90 per cent of the paddy had been sown by the second week of August last year. But this year, only about 70 per cent sowing has been done.

The most affected state is Jharkhand. Here, paddy was sown on 1.525 mha in 2021. But this year, only 0.3885 mha has been sown.

Similarly, paddy was sown on 3.027 mha in Bihar last year. But this year, it has been sown on 2.627 mha.

West Bengal has sown paddy on 2.43 mha this year, against 3.55 mha last year, Odisha 2.0368 mha against 2.468 mha, Uttar Pradesh 5.6930 mha against 5.892 mha and Madhya Pradesh 2.5480 mha against 2.994 mha.

Of course, no estimate has been issued by the Government of India about rice production so far. But the forecasts released by the United States Department of Agriculture (USDA) August 16, 2022 are  shocking.

The USDA has said rice production in India may decline by 0.9 per cent in 2022-23. This will reduce production for the first time after 2015-16.

According to the USDA, India is expected to produce 128.5 million tonnes of rice in 2022-23. There was a record production of 132.9 million tonnes of rice in 2021-22.

The USDA attributed the decline in rice production to the uneven distribution of the southwest monsoon.

However, the USDA said India would still be able to export rice since its production in other countries would also be less. The USDA has estimated the total consumption of rice in India at 108.4 million tonnes.

Rice stocks in India are usually enough as far as production vis-a-vis consumption is concerned. But this is possible only when the government keeps a close watch on the export of rice.

A similar problem happened in the case of wheat as well this year. While wheat production was decreasing, India was exporting wheat in large quantities to take advantage of the situation created by the Russia-Ukraine war.

Later, the government had to ban the export of wheat.

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