Nepali Farmers Benefit from Higher Paddy Prices Amid India's Rice Export Ban

Following India's ban on rice exports, Nepali farmers are benefiting from higher local prices for paddy. The state-owned Food Management and Trading Company in Birgunj is struggling to buy paddy, as local traders and rice mills are offering higher prices. The company, which supplies rice to several prisons in the eastern and central Tarai regions, has been unable to purchase paddy from farmers, with branch managers reporting an unprecedented lack of success in procurement. The company has contracts to supply various quantities of rice to prisons in Birgunj, Gaur, Bhimphedi, and Bharatpur, with a total demand of 175 tonnes per month.

Prices for Mansuli, a common variety of rice in Nepal, have increased substantially. Last fiscal year, Mansuli paddy was purchased at Rs 31.28 per kg, but this year, farmers are offered Rs 33.62 per kg, as set by the federal government. Additionally, the price for Jira Mansuli paddy has been fixed at Rs 35 per kg. Despite the Indian government granting Nepal a quota of 95,000 tonnes of rice, restrictive measures, including a 20 percent export duty, have been imposed, which Nepali traders say will make rice more expensive in Nepal.

The situation has led to higher prices for local paddy, with the current market rate reaching Rs 41 per kg and potentially rising to Rs 46 per kg soon. Traditionally, prices on the Nepal-India border align with the Indian market, but the export ban has forced rice mills in Nepal to turn to local producers. Despite the El Niño phenomenon, Nepal is expecting a record harvest of 5.72 million tonnes of paddy this fiscal year. Government officials believe that Nepal will not need to import rice from India due to this bumper harvest, although rice traders indicate that varieties preferred by urban consumers in Nepal are not typically produced domestically.