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Paddy prices firm up in Bengal on govt buying

Paddy prices firm up in Bengal on govt buying

Paddy prices in West Bengal have firmed up by nearly 10 per cent this year on the back of a robust procurement by the government and an anticipated surge in demand from Bangladesh. Price of paddy in the open market is currently ruling at around ₹1,600-1,700 a quintal as against ₹1,400-1,450 during the same period last year.

According to Sushil Kumar Choudhury, President, Bengal Rice Mills Association, the State government has already achieved over 22 per cent of its targeted procurement of around 52 lakh tonnes (lt) for this crop season.

The central government has fixed the MSP of paddy (common grade) at ₹1,868 a quintal for the 2020-21 crop year — marginally higher by around ₹53 a quintal.

“The State government has procured close to 11.2 lt of paddy till December 31. The way things are progressing, the procurement is likely to be better than last year. There is also a good demand coming in from Bangladesh and this has helped push up prices,” Choudhury told BusinessLine.

Bangladesh factor

According to industry estimates, Bangladesh is likely to import around 10-20 lt of rice in 2020-21 as local prices there have jumped to a record high on the back of limited supplies. This is likely to push up rice exports from India, particularly from Bengal which offers the grain at competitive rates.

The total export of non-basmati rice to Bangladesh was around 9 lt in 2019-20 estimated at around ₹2,600 crore. Major export happens between September and February. The recent floods in Bangladesh have impacted its production thereby pushing up prices. Bangladesh also recently slashed its customs duty on rice to 25 per cent from 62.5 per cent to augment supplies.

“The importers will have to apply for permission to the Food Ministry to import before January 10. But we expect a good quantity of rice to be exported from Bengal this year,” said Suraj Agarwal, CEO, Tirupati Agri Trade.

Bumper output likely

West Bengal, which produces close to 150-160 lt paddy each year across the three seasons and accounts for nearly 14 per cent of the country’s total production, is likely to witness higher crop this year backed by favourable weather conditions.

The expected rise in production was likely to bring down prices, however, they have remained fairly stable and are rising due to the good demand. “We expect prices to rise in the next fortnight backed by the demand from Bangladesh and the steady procurement by government,” said a rice mill owner.

This article is auto-generated by Algorithm Source: www.thehindubusinessline.com

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