Rice and wheat stock sufficient for non-rainy days

KOLKATA/NEW DELHI: Even though the Meteorology department has predicted below-normal monsoon this year, rice and wheat prices are likely to remain steady as the country has enough stock of these two grains. There may be a slight upward swing in cooking oil prices as imports may increase if rainfall is less but pulses prices are expected to remain steady.

India is forecast to get 93 per cent of its average rainfall this monsoon because of a 70 per cent chance of the El Nino factor by July and early August. This is lower than the April estimate that had forecast 95per cent rainfall. Nearly half of India's population livelihood depends on this sector and a poor monsoon will have a ripple effect on the rural economy and demand for consumer goods.

However, India has a good bufferstock of grain which will help the new government put a check on rising prices. Against a buffer norm of about 100 lakh tonne of rice and 170 lakh tonne of wheat, the total central pool stock as on June 1 was 206.45 lakh tonne of rice and 415.86 lakh tonne of wheat. This is expected to keep prices of grains under check said traders.

Tejinder Narang, a grain consultant said wheat and rice prices will have no impact due to weak monsoon. "We have sufficient stock for wheat and rice. The demand for Indian rice including basmati has gone down in the global market. Non-basmati prices in Thailand have come down by $150 to $380 a tonne in the past one year making Indian prices competitive in the global market," he said.

Iran has also slowed its purchases by a significant percentage and raised duty from 24 per cent to 40 per cent for all rice imports. Shakti Bhog Foods, India's largest player in milled products, does not expect changes in prices for wheatbased products.

"There is ample wheat in the country and prices will remain stable," said Siddharth Kumar, executive director, Shakti Bhog. Edible oil prices may appreciate by 2 per cent-3 per cent if India has to import higher volumes this year if lesser rains affect oilseed crop. Prices of October contract of soybean futures has risen . 200 per quintal, traders said.