Rice Prices Increase Due to Demand from Bangladesh, Iran & Iraq

Due to rising demand from Bangladesh, Iran, Iraq, and Saudi Arabia as well as a shortage of paddy land in many regions, prices of all varieties of rice have increased by up to 30% since the beginning of June.

The higher cost of the staple grain would hurt Indian households who are already suffering from rising inflation.

Since farmers in the major producing states of Uttar Pradesh, Bihar, Jharkhand, and West Bengal slowed planting due to poor rainfall. The area covered under paddy, the primary crop during the Kharif season, was 13.3 percent less across the Country till July 29 from the same period last year. In Chhattisgarh and Odisha, the sowing rate has also dropped. While this has raised concerns about a shortage in grain production, increased export demand has driven up prices.

According to BV Krishna Rao, president of the Rice Exporters Association, "Bangladesh has started importing rice from India, which has impacted the favoured varieties of rice in Indian families like Sona Masoori, whose prices have gone up by 20 percent."

The six northern and eastern states listed previously had 3.7 million less hectares of paddy planted as of July 29 than they did at this time last year. Nearly ten percent of India's 39.7 million hectares of Kharif rice are in deficit.

The smaller area has put close to 10 million tonnes of output at an average yield of 2.6 tonnes per hectare.

In fiscal 2022, India produced 130 million tonnes of rice, including the winter harvest, and exported 21 million tonnes of it. For the current Kharif season, the nation hopes to produce 112 million tonnes of rice.

Kolkata-based Tirupati Agri Trade's CEO, Suraj Agarwal said: “Prices of all varieties of rice have increased by 30%. The cost of the Ratna varieties of rice has increased from 26 to 33 per kg. Due to the high demand from Iran, Iraq, and Saudi Arabia, basmati rice prices have also shot up by almost 30 percent, rising from Rs 62 per kg to Rs 80.”