Govt may look at raising rice prices in Aug/Sept '11: KRBL

The rice stocks have been quite active today. They have been doing very well in trade. Anil Mittal, CMD of KRBL and Gurnam Arora, Joint MD of Kohinoor Foods, in an interview with CNBC-TV18’s Anuj Singhal and Sonia Shenoy, gave their perspective on the rice stocks and how the are expected to do going forward.

Below is a verbatim transcript of the interview. Also watch the accompanying video.

Q: What is going right for the rice sector? What kind of pricing trend have you seen over the last two-three weeks? Has there been a bit of upmove?

Mittal: There has been an upmove in the rice prices because of the demand from Iran. Other than demand, the procurement which was being suppressed by Saudi and other countries in last three weeks has come up. There has been quite a good price rise of about USD 50-80 per tonne in the last three weeks.

Q: This time around, there has been an expectation that the monsoons will be normal, which has raised hopes of better pharma output and stable food prices as well. Did you have any talk with the government to free the rice and wheat exports because you had indicated that provided the monsoon is stable, you can persuade the government to free the export situation? Have you had any talk on that account or anything that you are hearing?

Mittal: On a regular term, we have been in constant touch with the government to open the export of non-basmati rice. The total buffer with the government is 59.1 million tonne which is three times than the normal norms.

The present position is that there is no space with the government to store the rice. People in Punjab and Haryana are desperate because government is unable to take the levy share which they normally used to finish in the month of April.

More than 40% of the levy share in Punjab is lying as it is and rice millers are into deep problem. Rice has been rotting in the godown and in open as well. I was quite confident after talking to various government officials that in the month of April end or May they will open it. We are now confused on what is the government making. The government has not opened the rice exports.

Q: Have you had discussions with food ministry on exports of non-basmati rice? What is the situation currently?

Arora: I don’t know what political compulsions the government has to not open non-basmati exports. There is no point of rotting all the grains in the ware houses.

Supreme Court is also very concerned about it and has taken up this matter number of times with the government. Because of the food inflation, they have a fear that market will slightly flare up.

We have been asking for just 5 million tonnes of non-basmati and that is the maximum India can export at this point of time. It is not only that we have allowed exports and export will happen. If we are competitive, only then we will be able to do it.

Q: What about the basmati exports? What kind of prices are you seeing currently? In the past, the prices were picking up on that account. How much of a pick up you are hoping to see? What would that do in terms of translation to your revenue front?

Arora: This year, the market has not been as good as last year. Recently in the last two-three weeks, the market has been coming up.

Earlier because of these problems in Syria, Libya and Bahrain, a lot of importers did not want to import the same quantities like last year. Now, most of the Middle East countries are comfortable. They have started asking for prices and started looking at imports now.

Q: On an average, how much has the prices gone up by?

Arora: We have seen a change of about USD 30-40-50 per tonne in the last couple of weeks, depending upon the kind of basmati. With better monsoon outlook and the FMCG industry doing well, all looks good.

(Source: http://www.moneycontrol.com/news/business/govt-may-look-at-raising-rice-pricesaugsept-11-krbl_544275.html)