Despite a good Kharif crop and ample stocks with the Food Corporation of India (FCI), domestic rice prices have risen by 14.51% over the past year. To combat this, the Government of India has taken several steps, including offering rice to traders/wholesalers under the Open Market Sale Scheme (OMSS) at Rs. 29/Kg. The reserve price of rice was reduced from Rs. 3100/Qtl to Rs. 2900/Qtl, with a revised minimum and maximum quantity of 1 MT and 2000 MT respectively. As a result, 1.66 LMT of rice has been sold in the open market under OMSS, marking the highest sale in any year.
On the international front, the export policy for Broken Rice was amended from “Free” to “Prohibited” starting September 9, 2022. A 20% export duty was imposed on Non-Basmati Rice, which makes up about 25% of total rice exports, effective from September 8, 2022. The Export Policy for Non-Basmati White Rice was changed to ‘Prohibited’ from July 20, 2023. For Basmati Rice, only contracts with a value of USD 950 per MT and above are registered for the issue of Registration–cum–Allocation Certificate (RCAC), and a 20% export duty on parboiled rice will be applicable until March 31, 2024.
The Department of Food and Public Distribution is also monitoring wheat stock to control prices. To this end, the Government of India has been offloading wheat through weekly e-auctions since June 28, 2023, with a total of 101.5 LMT allocated for Open Market Sale Scheme (Domestic) [OMSS(D)] at a reserve price of Rs. 2150/Qtl for FAQ and Rs. 2125/Qtl for URS. As of January 31, 2024, 75.26 LMT of wheat has been sold under OMSS(D). Sugar Ex-Mill prices have seen a decrease of 3.5-4% since the start of the crushing season. To control edible oil prices, the Basic Duty on Crude Palm Oil, Crude Soybean Oil, and Crude Sunflower Oil was reduced to Nil, and the Agri-cess was lowered from 20% to 5%. The retail prices of various edible oils have decreased significantly as of February 1, 2024.
Tags
India