Tamil Nadu: Pricey rise in paddy price sets off alarm bells

With prices rising steadily, rice mills are finding it difficult to get enough paddy from farmers.
Image used for representation.
Image used for representation.Center-Center-Tiruchy

MADURAI: Paddy prices in open market have gone up almost 40% in southern districts, with the cost of the popular BPT variety of paddy, which was selling around Rs. 1,300 per 60kg bag, costing Rs 1,800 now. The increase in the cost of BPT paddy comes on the heels of a rise in the price of the RNR variety of paddy over the past few weeks. Traders say the price of fine varieties of rice across Tamil Nadu may increase by Rs.10 to Rs. 12 per kg in the next few weeks.

With prices rising steadily, rice mills are finding it difficult to get enough paddy from farmers. Crop loss in delta areas and southern districts has only made matters worse.

Notably, there was a massive decline in cultivated area in Madurai, with just 29,000 hectares covered under paddy cultivation this samba season. With the commencement of harvest season, paddy procurement has started across the region but compared to previous seasons, prices have gone up substantially due to the shortfall in supply.

Farmers from Thiruvadanai in Ramanathapuram said the RNR paddy variety, which was sold for Rs. 1,300 for a 60-kilo bag, increased to over Rs 1,700 for a bag. Now, the cost of the BPT variety has increased as well. “Earlier, the price of the BPT variety was Rs1,300 for a 60-kilo bag. It went up to Rs1,700 last week. As of Wednesday, the prices have neared Rs1,800 per bag. As there is a high demand, prices are likely to increase again,” said Parthiban, a rice mill owner from Tiruchy.

“Usually, we source paddy from local farmers till March. Owing to a shortfall in supply, we have to source it from other districts. Rice millers are unlikely to get any profit as the paddy purchase costs have gone up,” he added.

Joint Secretary of Tamil Nadu Rice Mill Owners and Rice Merchants Association in Madurai A Anbarasan said, “Currently, there is a major demand for rice in both domestic and international markets which has caused the prices to spike. Tamil Nadu is not self-sufficient in terms of rice supply. We have to rely on neighbouring states such as Karnataka and Andhra Pradesh and the prices there affect us here. The state government should encourage more farmers to take up paddy cultivation to increase production.”

Ravi, a farmer from Ramanathapuram, said, “Though it is good that prices of paddy are high in the open market when compared to previous years, the unseasonal rains in December 2023 and January have caused cultivation costs to increase by Rs 5,000-Rs10,000. The increase in paddy price, however, has helped us make small profit and avoid losses.”

President of Arani Taluk Paddy and Rice Association Babu said, “The price of rice has surged in Tiruvannamalai and surrounding areas. This spike is a result of heavy rains in Tamil Nadu and the poor rain in Andhra Pradesh and Karnataka, leading to heightened demand for rice imports. Consequently, rice mills have procured more rice from other states. Two months ago, some varieties of rice were sold at Rs52 per kilo. Now, the price has increased to Rs65 per kilo.”

Retail vendors are also concerned with the alarming increase in prices. A rice vendor from Chennai said that soon the cost of a 25-kilogram bag of rice may hit Rs 2,000, almost 40% higher than the average price.

“A 25-kilo rice bag is now sold at Rs1,750, up from Rs 1,400 last year. Prices usually fluctuate based on demand but it has never reached these levels. We are worried as wholesale dealers are saying that the price will only continue to rise further,” a rice vendor told TNIE

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