New Delhi: With India experiencing spiralling pulse-prices, Assocham on Sunday called for close monitoring of food prices, warning that rice prices may soon reach "boiling point" with stocks falling fast as a fallout of deficient monsoon and drop in output.
"Prices of rice may shoot up to reach a boiling point in the coming months as the stocks of the key staple cereal are depleting fast, owing to deficient rains and fall in output," Associated Chambers of Commerce and Industry of India (Assocham) said in a statement here.
"After pulses, onion and some edible oils like mustard oil, rice may cause pain-in-stomach of the consumers if timely adequate safeguards are not taken," Assocham's latest study said.
The industry chamber said though the government estimates kharif rice production at 90.61 million tonnes (MT), the target is unlikely to be achieved owing to severe deficit rains in Punjab, Haryana, Uttar Pradesh, Bihar, Maharashtra and Karnataka "and the best that could be achieved is 89 MT".
"The actual production may be around 103 MT during 2015-16. On the stock front, rice stocks have been steadily declining in the past three years," the study reported.
"As against the stocks of 24.59 MT in 2012, only 13.89 MT (plus unlimited paddy 3.61 MT) are in stock as of today," it added.
The study titled "Impact of weak/deficient monsoon on agricultural production and prices" said: "Increasing export outgo on account of PDS (Public Distribution System) and other welfare schemes will continue to weigh on availability in the open market".
"Unless government is able to handle the situation prudently, depleting stocks will soon reflect on the open market prices."
It said the deficient monsoon this year is likely to slow down the economy considerably and accentuate inflationary pressure coupled with shortages of essential food items across the country.
"A recurring monsoon failure might push the country into a tight corner in respect of rice, sugar, etc.," it said.
Assocham suggested that Direct Seeded Rice (DSR) should be encouraged to conserve water.
"Presently, less than 10 percent of paddy production is under DSR due to limitations in the availability of suitable equipment for DSR in clay soils. Urgent attention is needed in this regard to expand DSR acreage on war footing," the chamber said.
"Given the drop in kharif 2015 foodgrain production at 252.68 MT for 2014-15, against a record 265 MT for 2013-14, it is highly doubtful if India could reach even 250 MT for 2015-16, which is ominous," it added.