monsoon: Prices of basmati rice, edible oils and pulses ride high going into festive season

Prices of basmati rice, edible oils and pulses are riding high going into the festive season, a dampener for consumers. Dry spells in August followed by heavy showers in September have impacted the basmati and pulses crop. The 1509 basmati rice variety that is used in biryani saw a 36 per cent jump in prices at the wholesale level compared to last festive season.

Rains have impacted the quality of pulses and certain categories of pulses like have witnessed a rise of 10% -12% in prices. Edible oil prices, though, have fallen by Rs 10 per litre in last two months, but there is no possibility of a further reduction in prices in the near term as international prices are ruling high.

However, traders said that the price rise will not impact offtake of these essential commodities as the sentiment is positive among the consumers. There is a lot of pent-up demand in the market and with covid cases declining and pace of vaccination picking up, consumer purchase is showing an upward trend.

“Most of the state governments have withdrawn covid induced strict restrictions and shops have reopened in most parts of the country. Though consumers are cautious about a third wave, they are purchasing to celebrate the festive season in a better way compared to last year,” said Bimal Kothari, vice chairman, India Pulses & Grains Association.

Among pulses, the production of moong and urad kharif has been affected due to the weather conditions. Kothari said that moong production in Rajasthan has been affected due to dry weather condition in the state. Heavy rains in September, on the other hand, affected the quality of urad crop in Maharashtra and Madhya Pradesh. “Prices are up by 10% -12% now,” he added.

Commenting on the surge in basmati rice prices, Priyanka Mittal, director, KRBL Limited said “Overall, sowing has been less by 40% compared to the previous year so there has also been a deficit in production this year. In addition, the minimum support price of non-Basmati rice has increased, which in turn, has driven basmati prices upwards. The weather this year led to unexpected rains which led to lower-than-usual arrival of crop in the mandis. On a world scale, prices of commodities have gone up, basmati is no expectation to this macro change –rice-exporting countries such as Thailand and Vietnam last year realised as much as 30-40% hike.”

“Non-basmati rice prices have gone up because of strong export demand from Bangladesh and other countries,” said Suraj Agarwal founder of Tirupati Agri Trade.

Edible oil prices too will stay strong, said Sandeep Bajoria, CEO of oil consulting firm Sunvin Group. “Though prices of most of the oils have come down by Rs 10 per kg in last two months, but there may not be further correction during the festive season even though we have imported 18 lakh tonnes of edible oils. This is because international prices are strong, which is impacting our prices too.”