The Andhra government has managed to arrest the movement of rice to other states, especially Tamil Nadu, through laying down stiff conditions on the millers.

Grains merchants in Chennai say that in the place 130-150 truck loads of rice arriving daily from Andhra Pradesh, hardly 20 truck loads come these day. As a result the prices of superfine varieties like Sona (raw rice) has started picking up from Rs 15 a kg to Rs 15.50-15.70. Simultaneously prices within Andhra pradesh is on a steep fall.

However, the prices of coarse and boiled varieties have not reacted to the trickling flow from the neighbour owing to the bountiful harvest in Tamil Nadu and also due to the carry forward stocks of rice with the traders.

Millers in Andhra Pradesh have to sell two truck loads of rice, (10 tonnes each) to the state and Central pool respectively, at prices between Rs 500and Rs 600 a quintal. In this they suffer Rs 400-500 loss. This is compensated by the permission to sell two loads in the open market at market driven prices.

Earlier the traders could manage to get permits to sell their entire quota within or outside the state without much hassles. ``But this year the government is very firm and of the two loads for free sale, one has to be sold within the state. Only those who sell within can sell outside the state. Many millers are not able to fulfill this stipulation as there is no such demand in the state'', rice trade sources in Chennai told The Financial Express.

"During my 22 years of rice trade this is for the first time I am facing such a situation'', one trader said.

The reason for this `love for the people' is obvious. Chandrababu Naidu, the Andhra Pradesh chief minister, has to face elections in November. And it is for the first time that he is approaching the people on his own. He does not want to risk any shortage of the state's staple diet in thiselection year.

He might be having in mind the onion-effect on the Bharatiya Janata Party in the recent elections.''

The move of the government to make the millers sell the same rice to the state and Central quota as would be sold in the open market, and even to ban rice movement to other states, was foiled by the millers. ``But the government is very particular about the sale within the state and very uncompromising officers are posted at the checkposts'', traders say.

Fabrication of sale documents also is not possible as there is five per cent CST on each sale.

The Andhra Pradesh government issues permit for rice movement outside the state between March 1 and September 30. This year the first permit was issued only by the end of March.

Normally traders would manage to get the permit validated up to mid-November on several grounds. During that period there would be heavy flow of rice to Chennai. Traders would store for the next four months. ``This year traders have such carry forward stocks andsome of them are in trade with that stocks and holding the price line''

.Superfine varieties like Sona (wholesale rate Rs 15 a kg), 5293 (Rs 13.75) and Jeeraka Sambha (Rs 21) are the favoured raw variety rice from AP. (retail prices will be about Rs 2 more than the wholesale rate).

Tamil Nadu varieties are more suitable for boiled rice and most of them are sold in Kerala markets.

Now Tamil Nadu millers are making large quantities of raw rice to meet the market demand in the virtual absence of Andhra supplies.

In Tamil Nadu also the state government has declared Thanjavur, its rice barn, as procurement district and paddy cannot be sold outside the district thus depressing paddy prices in the state.

In spite of all these rice prices are not out of control and there is no shortage. Traders say, there is no shortage in supply, but shortage is in demand."The world over countries are removing barriers on borders but it is a paradox that in India the states are strengthening them. Let market prevail andeveryone get his due from Kashmir to Kanyakumari, one India one market. But will the politicians allow that to happen," they ask.