Hyderabad, Oct 2026 : Paddy prices in Telangana have surged to unprecedented levels during the ongoing Kharif season, bringing significant returns to farmers as private traders and rice millers compete to secure supplies. At the Kesamudram Agricultural Market in Mahabubabad district, the Jai Sriram variety fetched a record Rs 5,016 per quintal, setting a new high in the state's open market.
Fine paddy varieties are also commanding strong prices across Telangana. In districts such as Nalgonda, Karimnagar and Khammam, prices are reportedly ranging between Rs 3,000 and Rs 3,500 per quintal. The RNR variety has also attracted buyers, with prices reaching as high as Rs 4,300 per quintal.
The sharp rise in paddy prices has been attributed to changing supply conditions, increased demand and competition among private buyers. Paddy cultivation during the current Kharif season is estimated to have declined by around 14 per cent compared with the previous year. Concerns over the possible impact of El Niño on agricultural production have added uncertainty to supply forecasts.
Demand From Other States Pushes Prices Up
Demand from traders and rice millers in Karnataka, Maharashtra and Tamil Nadu has intensified competition for Telangana's paddy stocks. Some private traders are reportedly offering advance payments to farmers to secure supplies, further strengthening open-market prices.
The rising demand has created a widening gap between government procurement rates and prices offered by private buyers. As a result, several farmers are reportedly considering selling their produce in the open market instead of taking it to government procurement centres.
MSP and Fine Paddy Bonus Under Pressure
The minimum support price (MSP) for Grade-A paddy is Rs 2,461 per quintal. In addition, the Telangana government provides a bonus of Rs 500 per quintal for seven designated fine paddy varieties, taking the effective procurement price to Rs 2,961 per quintal for eligible Grade-A produce.
However, when private traders offer Rs 3,500 per quintal or more, government procurement centres may find it difficult to attract sufficient quantities of fine paddy. This could pose challenges for the state's efforts to procure fine rice for distribution through the Public Distribution System (PDS).
The situation highlights the challenge of balancing farmer returns with the government's food distribution requirements. While higher open-market prices benefit cultivators, procurement agencies may need to contend with stronger competition from private buyers.
Higher Paddy Prices May Increase Rice Costs
Although farmers are benefiting from the price surge, consumers are facing higher expenditure on rice. Retail prices of certain premium fine rice varieties have reportedly climbed to Rs 90–100 per kilogram in some markets, adding to household food expenses.
A farmer welcomed the sudden increase in prices, saying, "I never expected paddy prices to increase so suddenly. The higher rates will greatly benefit farmers."
Telangana Chief Minister A. Revanth Reddy has attributed the increase in fine rice prices to El Niño conditions. He also recalled that the government's decision to encourage the cultivation of fine paddy varieties had initially faced criticism, but said farmers were now benefiting from higher market prices.
November-December Harvest to Shape Market Trends
With paddy harvesting expected to gather momentum during November and December, market participants will be watching supply levels and procurement trends closely. The arrival of fresh stocks could influence prices, although the extent of any change will depend on demand from rice millers, private traders and government procurement agencies.
For now, record paddy prices in Telangana have improved the earning prospects of many farmers, while raising questions about government procurement, fine rice availability and retail rice prices in the coming weeks.
