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Informist, Monday, Sep 16, 2024

By J. Navya Sruthi

MUMBAI – Prices of basmati rice were up slightly as the government removed the minimum export price on the commodity, traders said. Prices of wheat were steady today in key markets across the country, traders said. 

Prices of basmati RICE rose slightly today as the government scrapped the minimum export price for the commodity on Friday, Devendra Vora, a wholesale broker at Mumbai's Vashi mandi, said. Prices were up 200 rupees at 7,300-7,400 rupees per 100 kg, Vora said. Earlier, the minimum export price on basmati exports was $950 per tonne. 

Tracking this development, shares of rice-based food companies also rose today, with KRBL being one of the top gainers in the Nifty 500 index. Shares of Kohinoor Foods hit the 20% upper circuit of 46.83 rupees, while those of KRBL and LT Foods were up 6% each.  

This step by the government was taken amid higher rice stocks – both basmati and non-basmati – in the country due to restrictions on rice exports. However, the government has kept the export duty unchanged on parboiled rice at 20%. The ban on exports of non-basmati rice also continues. 

In July 2023, the government had prohibited the export of non-basmati white rice due to concern over lower paddy acreage and to control soaring rice prices. However, in December, it allowed exports of non-basmati white rice to some African countries. 

Prices of WHEAT were steady today in Rajasthan's Kota at 2,600 rupees per 100 kg, Aniket Mehta, a local wheat trader, said. Arrivals were also steady at 6,000 bags (1 bag = 50 kg) from the previous day, Mehta said. Prices of wheat in Mumbai's Vashi mandi were also steady at 2,950 rupees per 100 kg, Vora said.

Prices are likely to be range-bound with upward bias for the next 10–15 days, Vora said. Despite reducing the stock limits, prices are seen upward due to fewer wheat stocks in the country, Vora said. 

On Friday, the government reduced the stock limits for traders/wholesalers to 2,000 tn, from 3,000 tn earlier, and for processors to 60% of the monthly installed capacity multiplied by the remaining months in the current financial year ending March. However, there is no change in the stock limit for retailers, which will remain at 10 tn. The stock limit for big chain retailers has also been retained at 10 tn per outlet, but the total wheat big retail chains can hold has been revised to 10 times the total number of outlets from 3,000 tn earlier.

As of Sep 1, wheat stocks with the government fell to 24.58 mln tn, below 27.58 mln tn of the buffer norms for Jul-Sep, according to the data from the Food Corp of India. The fall in wheat stocks is mainly due to lower procurement by the government during Apr-Jun. The government could not meet its wheat procurement target of 30-32 mln tn for rabi marketing season 2024-25 (Apr-Mar). Procurement of wheat by the government ended on Jun 30, with the Centre managing to buy 26.60 mln tn from farmers.  

End

Edited by Manisha Baxla

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