The Associated Chambers of Commerce and Industry of India (Assocham) has said the prices of rice are likely to increase by next year because of the poor rainfall this monsoon and declining stock of the staple food with the government.
The government estimate of the production of Kharif rice for 2015-16 has dropped to 90.61 million tonnes from 90.86 million tonnes in 2014-15 and 91.5 million tonnes in 2013-14. However, the industry body said Kharif crop production may not be more than 89 million tonnes.
"This is unlikely to be achieved due to severe deficit of rain in Punjab, Haryana, Uttar Pradesh, Bihar, Maharashtra and Karnataka and the best that could be achieved is 89 million tonnes," PTI quoted Assocham as saying.
Punjab, Haryana, Uttar Pradesh, Bihar, Maharashtra and Karnataka are Kharif rice producing states, where the process is highly dependant on the rain water, which was inadequate due to monsoon deficit in these regions.
Assocham said total output of rice in India in 2015-16 is expected to be 103 million tonnes, which is less than the annual consumption of 108 million tonnes, reported Mid-Day.
It said if the government does not take adequate measures in this regard, people will have to grapple with high prices of the staple food in the coming months.
"Prices of rice may shoot up and reach a boiling point in the coming months as the stock of the key staple cereal is depleting fast owing to deficient rain and fall in output," said Assocham.
The stock of rice with the government is reported to have declined from 24.59 million tonnes in 2012 to 13.89 million tonnes this year. The government's stock of the cereal is used at times of shortage.
Although Assocham has warned of price rice in the coming days, officials at the Agricultural Produce Market Committee (APMC) have claimed otherwise.
"Rice is cheap at present. We do not see any immediate impact on the prices of rice in the coming months, as the market is stable. Even if it increases, the impact would be minimal," said Grain, Rice and Oilseeds Merchants' Association (GROMA) secretary Kanji Gala.
However, Assocham said the prices are likely to rise despite the stable market at present. Assocham public relations director Manju Negi said the hike could be 10-15%.
"Apart from poor rainfall this year, decreasing stock in the past years will also be responsible for the price rise. Though the markets are stable now, in coming months, the scenario will change. The hike in rice prices cannot be predicted as of now. It depends upon the harvest. There can be a hike of 10-15% or even more than that," she said.