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Paddy price forecast - Paddy Prices to hover around MSP

Paddy Prices to hover around MSP


India is the world’s largest producer and exporter of rice. India’s rice exports in FY 2012-13 (April – March) stood at around 10.15 million tonne. Planting area under India’s Rabi rice (winter) crop has reached about 1.63 million hectares as on December 2013, up about 15% from around 1.42 million hectares recorded during the same time last year. India’s rice production in 2013-14 may decline to around 100 million tonne, down about 5% from around 105 million tonne produced in the previous year due to adverse weather conditions during the main crop season this year.

Cyclone “Helen” has damaged ready-to-harvest rice crop in an estimated 4.6 lakh hectares in India’s southern state of Andhra Pradesh, dashing India’s hopes of producing over 100 million tonne of rice in 2013-14 and triggering speculations of high rice prices in the coming months. Andhra Pradesh is a key rice producing state in India and accounts for around 10% of India’s total annual rice production. Some crop damage was seen due to cyclone “Phailin”.

The FAO has forecasted world rice production to around 494 million tonne for 2013-14 which is lower and it is due to worsening of crop prospects in China and India. Global rice utilization in 2013-14 is forecast to reach 489 million tonne, up about 2.6% or 12 million tonne from the previous year.

Global rice trade is likely to decline in 2013-14 due to lower purchases by leading importers and poor production prospects in India and China, according to the UN’s Food and Agriculture Organization (FAO). Rice trade in 2012-13 was expected to reach around 37.6 million tonne, down about 2% from around 38.4 million tonne in the previous year. In 2013-14, global rice trade is likely to decline further by around 0.5% to around 37.4 million tonne, according to the FAO. Indonesia, Iran, South Korea and the Philippines are all expected to reduce their imports due to abundant supplies. Production is increasing in all these countries while rice consumption is on the decline in South Korea. Imports by African countries are also likely to decline. The FAO says that China’s rice imports are likely to remain high in 2012-13 and 2013-14, but may decline if global prices increase. Exports by Pakistan, the U.S. and Vietnam are also likely to decline.

In the above scenario, to help the farmers to take a right marketing decision of paddy the Market Intelligence Cell (MIC) functioning in UAS Bangalore collected and analyzed the modal prices of paddy that prevailed in Maddur market during the last fifteen years. Based on the analysis and Market survey, it is forecasted that Kharif season paddy would fetch a modal price of around Rs. 1300-1400/quintal during January-February 2014 and Rs.1400-1600/qlt in March-April 2014. This forecast prevails for current market sentiments import and export policy. Government of India has announced a minimum support price for paddy at Rs. 1310 per quintal for kharif 2013-14. Farmers are advised to sell paddy upon harvest as the prices are unlikely to increase during the forecast period.


Research team

Dr.C.P.Gracy, Nagashree,N., Jyoti Naik.

Department of Agricultural marketing co-operation and business Management

UAS, GKVK, Bangalore-65


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Please note that this is the opinion of the author and is Not Certified by ICAR or any of its authorised agents.