KARACHI, June 6: Rice cartels bagged about Rs200 billion in a price game that pushed the rates high up to 300 per cent in a short period of six months.

According to trade sources a group of big investors, traders, top 30 rice exporters and some players at National Commodity Exchange Ltd (NCEL) engineered the price game to fleece the common man and deprive him from his basic food item.

However, for the last one week they have accelerated the sale of hoarded stocks in anticipation of sharp decline in world market prices, which fell from $1,050 per ton to $830 per ton for 100 per cent white Thai rice.

Even after harvesting good wheat crop of 23 million tons and rice crop (2007-08) 5.5 million tons prices of both the essential commodities were pushed up sky-high by creating artificial shortage in the domestic market.

The flawed system of essential food supply and its price monitoring allowed cartels of boarders to fully exploit the situation at the cost of poor masses, who have to stand in long queues to get wheat flour at subsidised rates from utility stores.

Although subsidies lead to inflation the economic managers are suggesting Rs50 billion subsidies on food items at a time when there is no shortage of food grains in the country.

A leading food grain dealer Shamshad Ahmed told Dawn that the only way to check soaring food prices is to withdraw all sorts of bank finances, which encourage cartels to hoard by using cheap funds obtained from banks.

Another rice dealer and exporter Zulfikar Thaver said that it was totally baseless to say that the reason behind domestic price spike was a global phenomenon. If this was true, he said, Pakistan would have exported higher volume of rice whereas during July-April of current fiscal year 2.429 million tons of rice was exported compared to 2.689 million tons in the same period last year.

Mr. Thaver said according to official figures 908,736 tons of basmati rice valued at $653.546 million was exported with an average unit price (AUP) of $719 per ton and 1,520635 tons of non-basmati rice valued $557.375 million was shipped with AUP at $366 per ton. If there has been any quantum increase in rice exports as compared to the previous year the reason could have been justified.

Growers cannot be blamed for price spike as they sold their paddy of super basmati by December at an average rate of Rs1,000 to Rs1,200 per 40kg. Likewise, paddy of P-386 rice (non-basmati) was sold by farmers at an average price of Rs600 to Rs750 per 40kg.

Giving details of windfall profits made by cartels and hoarders, the market sources said that the average calculated cost price of super basmati crop (2007-08) to rice millers, dealers and traders was Rs47 per kg and for P-386 the average price was Rs27 per kg.

However, rice cartels hoarded P-386 rice at an average price of Rs30 per kg and super basmati rice at Rs50 per kg in January this year. These varieties of last crop (2006-07) were hoarded at Rs22 per kg and Rs27 per kg, respectively, in December 2006, he added.

Since seasoned rice fetches better price than the old crop P-386 in wholesale market was sold during last two weeks at Rs85 per kg giving a windfall profit of Rs63 per kg and super basmati at Rs105 per kg allowing a hefty profit margin of Rs78 per kg.

Similarly, he said that Irri-6 rice price surged from Rs17 to Rs47 per kg and have blessed hoarders with a profit of Rs30 per kg. Irri-9 rice price soared from Rs25 to Rs65 per kg, giving handsome profit of Rs40 per kg.