Rice prices may reach “boiling point” warns Assocham

After pulses it may be the turn of rice prices to  rise sharply, industry body Assocham said on Sunday as it called for close monitoring of food prices.

Assocham said rice prices may soon reach ''boiling point'' as stocks fall fast due to  deficient monsoon and a steep decline in output.

''Prices of rice may shoot up to reach a boiling point in the coming months as the stocks of the key staple cereal are depleting fast, owing to deficient rains and fall in output,'' Associated Chambers of Commerce and Industry of India (Assocham) said in a statement in New Delhi.

''After pulses, onion and some edible oils like mustard oil, rice may cause pain-in-stomach of the consumers if timely adequate safeguards are not taken,'' according to Assocham's latest study.

According to the industry chamber, though the government estimates kharif rice production at 90.61 million tonnes (MT), the target was not likely to be achieved due to severely deficient rains in Punjab, Haryana, Uttar Pradesh, Bihar, Maharashtra and Karnataka ''and the best that could be achieved is 89 MT''. ''The actual production may be around 103 MT during 2015-16. On the stock front, rice stocks have been steadily declining in the past three years,'' the study reported.

''As against the stocks of 24.59 MT in 2012, only 13.89 MT (plus unlimited paddy 3.61 MT) are in stock as of today,'' it added.

The report, however, runs counter to the price trend in the market, where wholesale prices of non-basmati prices have shown a downturn at Rs25 per kg as against Rs30 per kg last year.

Similarly, wholesale rates of premium basmati rice had declined sharply by about 30 per cent to Rs44-45 per kg at present from Rs62-65 per kg last season, according to traders.

"Increasing export outgo on account of PDS (Public Distribution System) and other welfare schemes will continue to weigh on availability in the open market. Unless government is able to handle the situation prudently, depleting stocks will soon reflect on the open market prices", the report added.