Rice :: Crude Oil

Some studies conclude that oil prices and rising production and transportation costs have helped drive current commodity price increases. But many of these impacts occur with a significant lag. Higher crude oil prices have pushed up the cost of producing agricultural commodities through increases in the price of inputs, such as fertilizer and diesel, but the long-term impact of these increases has yet to be felt.

Agricultural commodity price increases have a much greater impact on low-income consumers, especially in developing countries, because food is a much larger fraction of total expenditures and commodities are a larger share of their food consumption. Another side of the higher commodity price story that has gotten relatively little attention is the potentially large supply response that could result as farmers in developing countries increase production and productivity. Higher prices could induce these farmers to purchase and use inputs such as improved seeds and fertilizer, which would lead to substantial increases in productivity and economic gains.

Prices of rice, which were Rs.13/kg in 2005 went up to Rs.22/kg in October 2009 have reached Rs.48/kg in January 2010. •Price paid to the kisan for Rice is between Rs.9 to 10 per kg in the last 3 years but the retail price of Rice has gone up to Rs.48

Product (Rs./Kg) Metro cities	2005	2007	Oct, 2009	Jan,2010
Rice	13	15	22	48
Wheat	9	12	13	29
Sugar	19	19	32	50
Tur Dal	30	36	82	100

The world price of oil-dependent fertilizers—essential for rice production—has increased sharply, with the price of urea exploding. The rapid growth of the biofuel industry has also increased pressure