Editorial
Rice price keeps soaring
A balanced approach needed to contain it
Rice price situation continues to worry us. Government decision to import 2.5.lac tonnes of rice from Vietnam at a price 35 per cent higher compared to four months ago is disquieting news to be sure.
Under an agreement with the government the importers opened L/Cs for import of 5.5 tonnes of rice and this being Aman harvest time there is no reason why price should go up, rather the rice market should have been stable and price settled at a reasonable level. Consumers find themselves at a loss over the increasing prices. This is an unusual phenomenon, which the Prime Minister has taken note of and assured us of conducting a probe into the matter. The government has so far received only 78000 tonnes, leaving it no option but to go for import to meet the deficit. Importing rice at high cost would also bring inflation into local price
The situation appears to have all signs and symptoms of an artificial crisis. There's no question that the rice-millers and suppliers have been holding on to their stocks.
The government procurement drive fell far short of meeting the target because when it increased the rate of purchase the open market operators raised their rates too! This was confounded by the fact that the dealers who made commitment on releasing rice to market in appropriate quantities on need basis did not do so.
Admittedly, the OMS and VGF programs of the government have been a relief for the ultra-poor, but the market price remains fluctuating on higher side, making purchase difficult for large majority of consumers. Satisfactory food reserve will be required to implement different food programs. The government also has to maintain a buffer stock for the rainy day as well to leverage stability in the market. This cannot be lost sight of.
Instead of endeavoring to apply force or impose decisions on the market players, government would do well to take the trading community into confidence and find out effective ways to ensure smooth operation of the consumer market, allowing the market forces of demand and supply to operate unhindered. For all we know, importers, suppliers wholesalers and retailers have their associations in addition to a strong presence of trade and chamber body leaders. Apparently, there is a disconnect among them but what seems to hold sway is the syndicate supposedly having links in higher places. The government should know who have formed syndicates and it ought to be in a position to neutralize them.
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