Heavy arrivals of paddy and rice have dampened prices across Tamil Nadu and the major urban consumption centres including Chennai market, say leading traders.
Tamil Nadu is a major market for produce from Odisha, West Bengal and Gujarat apart from neighbouring Andhra Pradesh and Karnataka. But arrivals in recent weeks have dropped because transactions are down, say trade sources.
Till a few weeks back, rice prices of new stocks were ruling steady in wholesale at about ₹38 a kg. But now some of the fine varieties are down to ₹34-35, while boiled rice variant fetches about ₹35-36.
Bulk buying absent
Sales are also down due to holiday season as hostels and other institutional buyers will not be in the market, according to Amara Visweswararao, President, Tamil Nadu Food Grain Merchants Association. Normally, the wholesale market in Chennai which sells about 600 bags (of 25 kg each) daily around this period sells just about 100-200 bags. Also, traders are waiting for further drop in prices and rice millers are flush with paddy stocks.
Price outlook
Over the last 20 days about 3,400 tonnes of paddy has come in at Ammoor. This is about 30 per cent more than that in 2016. At Vridhachalam, during the peak arrival season between January and March about 25,000 bags (of 75 kg) arrived on a daily basis comparable with last year. Fine varieties fetched up to ₹2,200 a quintal, down about Rs 300 over last year, against an MSP of ₹1,660.
According to AC Mohan, Secretary, Federation of Tamil Nadu Rice Millers and Paddy, Rice Dealers Association, open market sale of rice in the State is estimated at about 91 lakh tonnes (lt) annually. Local production will account for about 76 lt and the balance comes from other States. For now, the trade estimates there is a 5-lt surplus in the market with the trade.