- Fine-variety prices in local retail markets reach INR 70-73/kg
- Concerns over yields, strong demand support rice prices
Rice prices in Andhra Pradesh have risen sharply in recent months, with prices of commonly consumed varieties increasing amid concerns over paddy availability ahead of the new kharif harvest. In Vijayawada, the price of a 26-kg bag of rice increased from below INR 1,400 in May-June to around INR 1,600 in August and INR 1,750 by the third week of September. Fine-variety rice is currently selling at around INR 70-73/kg in local retail markets. Andhra Pradesh consumes an estimated 600,000 tonnes of rice every month, while a four-member household is estimated to require at least 25 kg of rice per month.
Lower paddy acreage raises supply concerns
The increase in rice prices comes amid concerns over lower paddy cultivation during the current kharif season. The decline in paddy acreage has been attributed partly to El Nino conditions, reduced kharif cultivation and government advice encouraging farmers to consider alternative crops.
Although transplanting has been completed in several areas where water was available, concerns remain over crop development and harvest prospects. These supply concerns have contributed to a steady rise in rice prices across wholesale and retail markets. Rice prices have remained below INR 63/kg in some official assessments, while open-market prices have moved considerably higher. For the current kharif season, transplanting has reportedly been completed across 12.72 lakh hectares against a target of 15.14 lakh hectares, or around 84%.
PDS demand remains significant
Andhra Pradesh has more than 1.48 crore rice cards, covering over 4.32 crore beneficiaries receiving monthly supplies through the Public Distribution System (PDS). Under the PDS, eligible beneficiaries receive 5 kg of food grains per person per month, while Antyodaya Anna Yojana households receive a fixed allocation of 35 kg per card. The monthly PDS requirement is estimated at around 2.16 lakh tonnes of rice, based on 4.31 crore beneficiaries receiving 5 kg per person.
Government measures aim to ease prices
Following concerns over rising food prices, the state government has sought price stabilisation assistance from the Centre. The Civil Supplies Department has also announced plans to sell rice through Rythu Bazaars at INR 52/kg, with each family allowed to purchase up to 10 kg against an Aadhaar card. However, the availability and quality at these outlets remain inadequate. The government is also supplying rice through existing PDS channels to eligible beneficiaries.
Outlook
Rice prices in Andhra Pradesh are likely to remain sensitive to new-crop arrivals, paddy procurement, crop yields and retail demand in the coming weeks. Lower paddy acreage and concerns over harvest availability could keep prices supported, while improved arrivals from the new kharif crop may provide some relief. The pace of procurement and the availability of subsidised rice will remain important factors for the state’s rice prices.
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