Rise in rice prices is a cause of concern due to accelerating food inflation in India
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Rise in rice prices is a cause of concern due to accelerating food inflation in India
Concerns around elevated wheat prices made analysts apprehensive of the chances of consumers shifting to rice in a bid to opt for cheaper food options which could lead to an uptick in its prices.
The price of rice has remained stable for now, owing to ample inventory and robust production. But this could change if the customers switch to rice which could lead to a depletion in stockpiles and trigger restrictions on exports. Rice remains the primary staple for more than half the world's ..
Farmers and the Indian government are banking on the monsoon to keep rice production, inventories and food inflation at a manageable level.
“As a higher price for one food item can lead to substitution effects, we expect a further broadening of food price inflation. In particular, we are monitoring rice prices closely. At the current stage, the risk of rice protectionism is low, because rice prices have been relatively stable, despite the surge in wheat prices,” Nomura said in a note.