Rising rice prices in South India: the impact of weather conditions and concerns about the harvest

Between June 1 and July 29, rainfall in southern India was 26 percent below the long-term average. The most pronounced rainfall deficit was recorded in Andhra Pradesh, where the indicator fell by nearly 40 percent, while in Kerala, precipitation levels were more than 20 percent below normal. According to experts, these weather conditions are caused by the El Niño phenomenon, which negatively impacts rice crops and threatens the yield for the current season.

A rise in retail prices for rice is being observed across the south of the country, leading to increased household expenditures. In the state of Karnataka, the average retail price of rice between May and July rose by 14 percent, which significantly exceeds national averages. Neighboring Tamil Nadu has recorded some of the highest average prices in the region. Some shop owners report that the cost of certain rice cultivars has increased from 50 to 80 Indian rupees per kilogram, with forecasts suggesting a possible price hike to 100 rupees.

There are alternative opinions regarding the reasons for the price dynamics. Climate policy analyst Soumya Dutta argues that the price increase may be linked not so much to an actual shortage of products as to speculation against the backdrop of expectations of a poor harvest. According to him, market players may be withholding stocks in anticipation of the situation worsening, while state warehouses of the Food Corporation of India (FCI) possess sufficient buffer stocks that could stabilize the market.

Authorities in the state of Karnataka have denied claims of intentional grain hoarding, reporting consultations with farmers and traders to curb prices. Other southern states have begun implementing support measures, including the distribution of certain types of grain at subsidized prices. Experts are calling on regional governments to assist farmers by providing access to free or subsidized seed and fertilizer to minimize the consequences of unfavorable weather conditions for rice production.