Prices of basmati rice, edible oils, and pulses are skyrocketing as the festive season approaches, putting a damper on consumer. The basmati and pulse crops have been harmed by dry spells in August followed by heavy rains in September.
The wholesale price of the 1509 basmati rice variety used in biryani increased by 36% compared to the previous festive season.
Rains have damaged the quality of pulses, and certain kinds of pulses have seen price increases ranging from 10% to 12%. However, edible oil costs have decreased by Rs.10 per litre in the last two months, but there is no chance of additional price reductions in the short term since worldwide prices remain high.
However, traders believe that the price increase will have little effect on consumer demand for these essential commodities because consumer sentiment is positive. There is a lot of unmet demand in the market, and with covid cases decreasing and vaccination rates increasing, consumer purchases are on the rise.
“Most state governments have withdrawn covid-induced strict restrictions, and shops have reopened in most parts of the country.” Though consumers are apprehensive about a third wave, they are spending more money this festive season than they did last year, according to Bimal Kothari, vice chairman of the India Pulses & Grains Association.
The production of moong and urad kharif, among other pulses, has been hampered by weather conditions. According to Kothari, Rajasthan's moong output has been affected by the state's dry weather condition.
In contrast, heavy rains in September harmed the quality of the urad crop in Maharashtra and Madhya Pradesh. “Prices have now risen by 10% to 12%,” he continued.
Priyanka Mittal, director of KRBL Limited, commented on the rise in basmati rice prices, saying, "Overall, sowing has been reduced by 40% compared to the previous year, therefore there has also been a deficit in output this year." Furthermore, the minimum support price for non-Basmati rice has risen, pushing basmati prices upward. This year's weather brought unexpected rainfall, resulting in a lower-than-usual crop arrival at the mandis. On a global basis, commodity prices have risen; basmati is not immune to this macro change; rice-exporting countries such as Thailand and Vietnam saw price increases of up to 30-40% last year.”
“Non-basmati rice prices have risen due to high export demand from Bangladesh and other countries,” according to Suraj Agarwal, founder of Tirupati Agri Trade.
Sandeep Bajoria, CEO of oil consultancy business Sunvin Group said, “edible oil prices will remain robust as well. “Although the prices of most oils have dropped by Rs.10 per kg in the previous two months, there may be no additional corrections over the Festive season, despite the fact that we have imported 18 lakh tonnes of edible oils.
This is due to the fact that worldwide prices are high, which has an influence on our prices as well.”
