KATHMANDU, AUGUST 1

In a sign of lax market monitoring, the price of various types of rice has surged by more than 16 per cent in the domestic market in the recent days in the pretext of Indian government banning export of non-Basmati white rice.

According to Chandan Pandit, a retail shop owner in Jorpati, the price of 25kg sack of non-basmati rice has increased from Rs 1,800 to Rs 2,100 and is likely to rise further in the coming days.

Even the National Consumers Forum (NCF) today sought to draw the attention of the government on increasing prices of essential commodities including rice, lentils, and oil.

In a statement submitted to the Office of the Prime Minister and Council of Ministers, NCF has said that owing to weak monsoon in the Asian countries, including Nepal, alongside increasing consumption of rice in the country, rice shortage and its price hike is likely. The NCF has also blamed the government's flawed supply policy, price analysis and pricing policy, and weak distribution system for unnecessary and unnatural increases in prices, and burdening Nepali consumers.

According to the forum, around 5.5 million metric tonnes of paddy were produced in the country in the last fiscal year. Stating that the local demand amounts to about seven million metric tonnes annually, the country had imported around 1.6 million metric tonnes of paddy worth Rs 37 billion in the last fiscal year, as per the data maintained by the Department of Customs.

In the fiscal year of 2021-22, the country imported around 1.5 million tonnes of rice from India including paddy. In the last fiscal year, the government of India levied a 20 per cent duty on export of paddy and rice to reduce exports and maintain its food reserves.

With increasing food shortages in neighbouring countries, India banned the export of non-Basmati rice for three months from September till December of 2022 but had also set a quota of 600,000 tonnes of paddy to be exported to Nepal.

'Due to internal reasons, the Indian government has banned the export of rice yet again. But there is no need to worry about possible shortage in the domestic market,' said Subodh Kumar Gupta, immediate past-president of the Association of Nepalese Rice, Oil and Pulses Industry.

He explained that rates for all kinds of paddy have increased by five rupees per kg, thereby resulting in a hike in the price of rice in the Indian market as well. As most of the imported paddy comes from India, it has contributed to a hike in prices in the local market here as well.

'However, with enough stock to fulfil the market demand until the harvest season in mid-November, there is really no need for panic-buying,' he assured.

Gupta, however, pointed at the over-reliance on imports as a major disadvantage for Nepal. 'There is a need for the private sector and government bodies to work together to assist farmers in identifying the current demands of the market and providing them with the necessary equipment and better connecting them with the markets.'

Similarly, Sunil Kumar Singh, senior agriculture economist and information officer at the Department of Agriculture, also said that the export ban by India will not significantly impact the domestic market as most of the rice consumed in the country is fine rice or Basmati rice.

'While we see some issues in the short term, the situation will ease out in the long term.

Our government is committed to increasing the country's production and is effortful in maintaining food security by increasing investment in agriculture and securing fertilisers timely,' he said.

Singh further said that while our cereal production is enough to meet the local demand, the growing habit of eating rice among Nepalis has contributed to the imbalances seen in the market. Also hinting at possible price gouging by unscrupulous traders, he said hoarding rice fearing possible shortage is, however, 'totally unnecessary'.

According to international agencies, India accounts for more than 40 per cent of world rice exports, and low inventories with other exporters mean any cut in shipments could inflate food prices already driven up by Russia's invasion of Ukraine and erratic weather.

A version of this article appears in the print on August 2, 2023, of The Himalayan Times.