JEDDAH: Consumers of basmati rice in the Kingdom are paying more even as the price has fallen by half in India over the past few months. Traders say the reason for this was that many suppliers stocked up on the grain when prices were high.
“There is no wonder the price of rice has not fallen in our markets even though in the exporting country it has fallen considerably,” Abdullah Al-Othaim, chairman of the Al-Othaim Holding, told Al-Eqtisadiah newspaper recently.
“The price has been rising in our market because of some specific reasons. There is plenty of rice stocked in the country at present because the Ministry of Commerce and Industry — in a bid to build up a strategic food reserve — had asked local importers to stock up rice in large quantities even at high prices so that the country would not have any shortage of this essential commodity,” Al-Othaim said.
In the face of looming food shortage worldwide and dire predictions of the food situation, the ministry had done the right thing, he added.
According to Al-Othaim, the price would start coming down only after the present stock was sold out.
“The price is bound to return to its normal levels when the fresh import from this year’s harvest reaches the local market and it may take at least six months,” he said.
Though the price of a 45-kilo bag of basmati crossed the SR300 mark, there has been no drop in demand, according to a salesman in the local market.
Saleh Al-Askar, an importer of Indian rice, said the price ranges currently from $1,150 to $2,200 per ton. The export price in India has also been eased with New Delhi abolishing a $200 tax per ton as a result of increasing Saudi pressure.
Al-Askar said he hoped that the price would start coming down after six months and would reach as low as SR180 per 45-kilo bag.
