The Indian government has instructed rice industry associations to promptly reduce the retail price of rice following a 12% year-on-year increase flagged by the Reserve Bank of India. Sanjeev Chopra, Secretary of the Department of Food and Public Distribution, cautioned industry representatives about profiteering practices during a meeting in New Delhi. Despite a favorable Kharif crop, sufficient stocks with the Food Corporation of India (FCI), and regulations on rice exports, the annual inflation rate for rice has remained at 12% for the past two years. Chopra emphasized the need to bring down domestic prices and address profit margins to serve consumer interests, warning that strict actions would be taken against undue profiteering.
Reports indicated a notable rise in profit margins for wholesalers and retailers, leading to a disparity between the maximum retail price (MRP) and the actual price. The government urged traders to narrow the price-profiteering gap to realistic levels. In response to rising prices, the government has already implemented measures such as restricting basmati rice exports and banning the export of two sub-categories of broken rice and non-basmati white rice. Additionally, it initiated the sale of rice in the market through the Open Market Sale Scheme for Domestic Market (OMSS-D). Despite these efforts, only a small portion of the allocated rice has been sold in the open market.
To encourage increased participation, the government has allowed bidders to bid for any quantity of rice from 1 to 2000 metric tonnes. The reserve price for rice in the auction ranges from Rs 2900 to Rs 3100 per quintal. However, traders have been hesitant to participate, citing the availability of cheaper and higher-quality rice in the market.
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