RICE prices are DOWN

Rice imports increased in January this in response to the predicted shortfall of this essential commodity. Existing stocks in the Alaotra region have not yet been put into the marketplace. All of this leads to an unexpected reduction in price for rice and gives the consumer some relief from the continual price increases we have faced for essential goods over the last several months. Of course the producers and wholesalers are not overjoyed by this trend. The Express comments, ?The thousands of tons of rice stocked in Alaotra cause some worry in the marketplace and drive down the prices of the first harvest. This creates a boomerang effect for the producers in Ambatondrazaka. While the harvest has already begun in this important national breadbasket, thousands of tons of rice are still sitting in local storage awaiting delivery to the market. The shortage experienced in 2004 may well have convinced small local producers to husband what they have in store. It is of course no advantage to them to release their stored harvest at lower prices. They may however be cutting their own throats in trying to save what they can in expectation of another shortage. While rising rice prices at the beginning of this year may have served to confirm to them that they were making the right decision, fewer and fewer buyers are making their way to Ambatondrazaka. With the large amounts now arrived as imports, the buyers are no longer certain of their profits and thus hesitate to invest in local or regional markets. So now the stored tons in Alaotra have no takers and the price is being driven down. A kilo of locally grown rice is now selling at 400 ariary while the same kilo was sold for 1000 ariary in 2005. ?