Rice: Gradual Price Increase in the Market

03-Jan-2025 10:58 AM

Rice: Gradual Price Increase in the Market
Last year, the government imposed stricter export regulations, which disrupted the efforts of exporters built over years. This allowed competing countries like Pakistan to strengthen their hold in the rice export market. Although export rules have been relaxed now, filling the void will take time.
Export demand is slowly emerging from Bangladesh and African countries.
A large stock in the central pool is becoming a problem.
The government will need to increase the use of rice for ethanol production in the future to free up space in warehouses for wheat before the start of the rabi season.
Distilleries were given rice for ethanol production, but purchases have not met expectations.
In upcoming tenders, the government may have to reduce rice prices. Last year and this year, FCI sold very little rice under OMSS, indicating that cheaper rice is available in the markets.
If the government wants to clear stocks or reduce maintenance costs, selling rice at lower prices under OMSS may become a necessity.
As export demand picks up, there is a potential for gradual price increases in the rice market.
If ethanol production from rice is approved, this price rise could happen sooner.