Rs 300 increase seen on 26-kg rice bag in Vellore

VELLORE: The price of a 26-kg bag of rice has reportedly increased by Rs 300 in the last three months in Vellore town.

The bags that earlier cost around Rs 950 now costs Rs 1,250 for ordinary rice varieties, while a similar trend was seen in Ponni rice, which costs more the longer it matures, also. This rice which earlier cost Rs 1,450 for a 26-kg bag now is dearer by Rs 300, traders said.

Asked about the reason for the spurt in prices, sources said that this was because most traders in south India were into rice export after getting the mandatory license.

“Earlier it was only traders in Punjab, who exported the long-grained Basmati rice. But now traders, especially those in Andhra Pradesh and Karnataka, are also exporting rice and even procure stocks directly from Tamil Nadu to meet their overseas demand,” said Ganesh Arunagiri, president of Vellore Paddy and Rice Merchants Association.

If the same trend continues, there may be further rise in prices, sources cautioned.

When asked for the reason why rice was packed in 26 kg and not the usual 25 kg, which was in existence till some time ago, Arunagiri said, “The 5 per cent tax on rice enforced by the central government is the reason why suppliers changed their tactics by switching over to 26-kg bags as the tax is for quantities up to 25 kg. The 26-kg pack does not attract tax,” Arunagiri said.

Murthy, a local, when asked said, “The central government taxing rice was an unwanted move as it will directly affect the common man given the fact that a 26-kg bag will meet the needs of a family of four for a month. Hence all are happy and willing to pay for the 1 extra kg as it will avoid the 5 per cent tax.”