The Ministry of Consumer Affairs, Food and Public Distribution has said that rice prices may continue to increase due to low production forecast by about 6 MMT of Paddy and an 11 per cent increase in export of non-basmati as compared to 2021.

The ministry said that the likely shortfall in area and production of Paddy for the Kharif season 2022 is 6 per cent.

In domestic production, 60-70 LMT estimated production loss was earlier anticipated.

"Now, production loss of 40-50 LMT is expected and production output is not expected to be higher this year but only at par with the previous year," it said.

The government acknowledged that there has been a rise in global demand for broken rice due to a geopolitical scenario which has impacted the price movement of commodities including those related to animal feed.

Export of broken rice has increased over 43 times in the past 4 years (21.31 LMT exported from April-August, 2022 compared to 0.51 LMT in the same period in 2019) with a significant jump in 2021-22 over last year.

In the year 2021, the quantity exported was 15.8 LMT (April-August 2021). Prices of broken rice rose significantly in the current year, the ministry added.

Talking about the domestic market, the retail price of rice showed an increase of 0.24 per cent over the week, 2.46 per cent over the month and 8.67 per cent over the year as on 19 September.

There is an increase of 15.14 per cent on an average of five years.

Since, ethanol season year (ESY) 2018-19, India has allowed grain based ethanol and in ESY 2020-21, Food Corporation of India has also been allowed to sell rice to ethanol plants for fuel ethanol production.

However, in the current ESY2021-22, against the contracted quantity of 36 crore litres, only about 16.36 crore litres (till 21.08.2022) have been supplied by distilleries due to low availability of broken rice for ethanol production.

Rice Prices Likely To Rise Amid Low Production Forecast: Govt