Rice prices tipped to go up this year

May 8th, 2008 - 9:59 pm ICT by admin  

A file-photo of P. Chidambaram

New Delhi, May 8 (IANS) Despite the government’s measures to control inflation, prices of food grain, particularly rice, will continue to remain on the higher side, a senior government official said Thursday. Quoting the latest Wholesale Price Index (WPI) report, K Ponnukaannu, senior economic advisor to the commerce ministry, said the price of rice was expected to harden two months later.

WPI figures indicate that the price of rice March 1 this year was Rs.1,525 per quintal and is currently Rs.1,400. But the report has projected the price will touch Rs.1,500 by July 6.

“This reflects the shortage and the substantial increase in the Maximum Support Price (MSP) of the food grain. But food grains, other than rice, will cost less,” Ponnukannu told IANS.

According to an official, global rice prices have tripled this year following fears of tight supplies after leading producers such as India and Vietnam curbed exports to ensure adequate supplies in their domestic markets.

The Indian government has already begun levying export tax of Rs.8,000 ($200) per tonne on basmati rice and has banned exports of non-basmati rice varieties.

Finance Minister P. Chidambaram said he would bring down the minimum export price to $1,000 per tonne from $1,200.

The Indian government is at present facing criticism with the annual rate of inflation hovering around 7.50 percent - a three-year high.

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