Rising rice prices draw out-of-State traders to Telangana paddy fields

Private traders from Maharashtra, Karnataka and Tamil Nadu are purchasing paddy directly from Telangana farmers at prices significantly above the MSP, driven by rising rice prices and expectations of further increases.

Hyderabad: With retail rice prices soaring, private traders from other States are stepping up paddy purchases directly from farmers in Telangana, anticipating a further increase in prices in the coming days.

The procurement is beginning even before harvesting is completed in several areas. At many places, traders are offering advance payments to farmers to secure paddy stocks.

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Traders from Maharashtra, Karnataka and Tamil Nadu are arriving in large numbers at markets in Nizamabad, Karimnagar, Khammam and Rangareddy districts to procure paddy. Depending on the variety, they are offering farmers Rs.4,000 to Rs.4,600 per quintal, significantly higher than the Minimum Support Price (MSP) of Rs.2,440 to Rs.2,460 announced by the Central government.

The Congress government has also announced a bonus of Rs.500 per quintal for seven fine rice varieties. Despite this, the prices offered by private traders are considerably higher, prompting farmers to accept advance payments and enter into supply agreements.

Paddy cultivated in the erstwhile Nizamabad, Warangal, Karimnagar and Khammam districts generally attracts strong demand. This season, however, traders are also entering into procurement deals with farmers in Rangareddy district.

Traders from Maharashtra are offering advances to farmers in Moinabad, Shankarpally, Poddutur and other areas to secure their produce.

Unlike government procurement centres, which are yet to begin operations this season, private traders are purchasing paddy without insisting on moisture levels and other quality parameters. At government procurement centres, personnel deduct two to three kg of paddy per bag, citing damage and other reasons, causing considerable losses to farmers.

Farmers also have to wait for their turn at procurement centres to sell their produce. These factors are prompting many of them to sell their stocks directly to private traders.

Meanwhile, fine rice prices in Hyderabad’s retail markets have climbed to Rs.85 to Rs.90 per kg. Within 30 to 45 days, the price of a 25-kg bag of fine rice has increased by Rs.300 to Rs.400, leaving households and kirana store owners worried. Many fear that prices could touch Rs.100 per kg in the coming days.

Against this backdrop, increased purchases of paddy by private traders from other States could put further upward pressure on retail rice prices. The trend assumes significance as the State government is appealing to farmers not to cultivate paddy during the Yasangi season.