Rice prices in West Bengal, which went on a downward spiral due to free distribution of foodgrain by the government, is firming up on the back of an anticipated surge in demand from Bangladesh.
Bangladesh recently reduced duty and other government charges on import of non-basmati rice to 25 per cent, from 62.5 per cent.
Price of the common variety non-basmati rice in the State was down by around eight per cent at ₹2,200-2,250 a quintal in July against ₹2,400-2,500 in the corresponding period last year.
Prices up in Bengal
Duty reduction, around three-to-four days back, has already pushed up rice prices in the State.
Price of the common variety non-basmati rice has inched up by around ₹200 a quintal, to ₹2,400 compared with ₹2,200 about a month ago.
The better quality miniket parboiled rice (usually shipped to Bangladesh) has seen a rise by ₹300 per quintal to ₹2,900 over the last week.
“West Bengal rice industry is dominated by non-basmati parboiled rice, and transportation cost is least from West Bengal to Bangladesh as compared to any other state in India. So, the majority of export of non-basmati rice in Bangladesh happens from West Bengal. Considering this, prices of non-basmati variants are bound to increase further in the State for retail consumers as well,” said Suraj Agarwal, CEO, Tirupati Agri Trade.
In 2019-20, Bangladesh imported close to nine lakh tonnes of non-basmati rice estimated at around ₹2,600 crore.
Though exact figures for 2020-21 are not available, industry estimates suggest exports to Bangladesh would be close to 10-15 lakh tonnes.
The Bangladesh government recently floated a tender to buy 50,000 tonnes of non-basmati rice from India.
A major chunk of the rice exported to the neighbouring country usually goes from West Bengal and the majority of the export happens between September and February.
Breather for growers
Production of kharif paddy, the traditional crop of West Bengal, is expected to be higher this year backed by favourable weather conditions and adequate rains.
The State produces close to 10.5-11 million tonnes of paddy during the kharif season accounting for nearly 70 per cent of the total production which is estimated to be close to 15-16 million tonnes a year and nearly 14 per cent of the country’s total production.
As per official estimates, West Bengal has 5.8 million hectares under rice cultivation. Though official estimates are not available, the State is likely to register a higher crop this year. Harvesting of paddy is expected to commence by mid-October.
Although the price of paddy has been steady at last year’s ₹1,500-1,700 a quintal so far this year, the firming up of rice prices might push up paddy prices too, industry sources say.
The reduction of import duty also comes as a breather for rice millers dealing in parboiled variety here. The millers had been hit due to poor demand in the domestic market on the back of huge availability of PDS rice.