Tamil Nadu : Increase in paddy prices puts Kangayam rice mills in a quandary
Rice mills in Kangayam, Tamil Nadu, are facing pressure from rising paddy and transportation costs, while weak consumer demand prevents higher rice prices. Mill owners report paddy shortages, increased input costs, and slowing production as retailers resist price hikes amid ample rice stocks.
For the rice mills in Kangayam in Tiruppur district, the increase in prices of paddy and transport in the last one month is a challenge as the retail market is unable to absorb hike in rice prices.
Palaniswamy, president of the Kangayam Rice Mill Owners’ Association, told The Hindu on Friday that price of paddy has increased by ₹5 to ₹7 a kg in the last one month. “Further, if we ask for 10 loads, we get only five to six loads of paddy,” he said.
Paddy shortage will be felt usually in the month of October or November. This year it is early, he said.
With the West Asia war and its impact on petroleum prices, transportation costs have also gone up. If the transit cost for one kg of paddy from Thenkasi to Kangayam was 0.85 paisa last month, it is ₹1 now.
The dealers who buy rice from the Kangayam rice mills usually keep stock for about 40 days and the mills have minimum one month stock of paddy. “Demand and spending on rice and grocery is slow every year from April 1 to July 10. People tend to travel during summer vacation and spend on their children’s education. So, they will reduce spending on rice and grocery. So even if we increase the price of rice, retailers do not accept it. They have rice stock and want to wait for the demand to pick up,” he added.
This has put the rice mills in a quandary and many mills are slowing down production, he added.
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Source : The Hindu
