Despite the central government's directive to the trade and industry to lower prices, non-premium non-basmati rice prices remain high. This unexpected trend persists even during the paddy harvest and a ban on rice exports. Traders attribute the elevated prices to the lower availability of non-premium non-basmati rice varieties in the market, primarily due to reduced monthly distribution and sales by the Food Corporation of India (FCI).
Analysis of FCI data reveals a nearly 50% decline in monthly rice offtake for September, October, and November 2023 compared to the same months in 2022. In September and October 2023, the monthly offtake was 2.838 million tonnes and 3.098 million tonnes, respectively, down from 5.848 million tonnes and 5.386 million tonnes in the corresponding months of 2022. November 2023 also saw a decline to 3.126 million tonnes from 7.083 million tonnes in the same month the previous year.
Trade insiders suggest that FCI reduced sales to align with combined buffer stock norms for wheat and rice, as wheat stocks were also insufficient. With less rice available through FCI, consumers turn to the open market, sustaining higher prices. Rice inflation has persisted in double digits for the past year, reflecting the challenges in stabilizing prices amid supply and demand dynamics.