In a first, govt directs rice sector to cut domestic prices

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₹29 per kg to traders and processors, according to the government. The directive has been issued after the food ministry came to know that rice is sold at ₹43 per kg to ₹50 per kg in the retail market. The government in July had banned exports of non-basmati white rice and imposed a 20% export duty on parboiled rice to improve domestic availability and affordability of the commodity.

Besides, the Centre set a minimum export price of $950 per tonne for basmati in October to discourage export of the premier rice variety. “It was discussed in the meeting that the domestic prices of rice are increasing despite a good crop this kharif, ample stocks with Food Corporation of India (FCI) and in the pipeline. The prices have increased despite various regulations in place on rice exports," the government statement said.

The food ministry said annual inflation rate of rice is near 12% for the past two years which is a cause of concern. The need to quickly pass on the benefit of lower prices to end consumers was discussed at the meeting. Leading associations have been advised to tell their members to ensure that the retail price of rise is reduced forthwith.

“There are reports of a sharp increase in the margins being availed by wholesalers and retailers which needs to be tempered," the statement said. Besides, it was suggested that where there exists a wide gap between the MRP and actual retail price, the same needs to be brought down to a realistic level in order to safeguard the interest of the consumers, it said. Disagreeing with the government’s diktat, grain merchant Naresh Gupta, who was also in the meeting, said, “We have requested the government to reduce the reserve price of rice to ₹2700 per quintal as the rice procured