Basmati prices may fall 18% on bumper output

Traders and exporters expect a bumper basmati rice output in the major producing belt (Punjab, Haryana and Western Uttar Pardesh).

According to them, prices of basmati rice would be in the range of Rs 17,000-18,000 a tonne, compared to Rs 21,000-22,000 a tonne last year. Traders, exporters and agricultural officials maintain that this year the production would be 10-15 per cent higher. Last year, the total basmati (paddy) production in the country was 6.5 million tonnes (mt), while this year it is expected to be 7.5 mt.

Haryana and Punjab are the major producers and contributes 70-75 per cent of the total basmati production in the country.

Speaking to Business Standard, Kohinoor Foods’ Joint Managing Director Gurnam Arora said: “This year, prices would be lower than last year on the expectation of bumper production. We expect prices would hover around Rs 17,000-Rs 18,000 a tonne.”

Currently, the crop has started arriving and prices of Pusa-1 variety are at Rs 17,000 a tonne while last year it was Rs 19,000 a tonne.

Echoing similar sentiments, Vijay Setia, president, All India Rice Exporter Association said conducive weather conditions supporting yield and quality for the paddy are likely to push up basmati production this year by 10 per cent. On being asked about the prices, he said, “Besides bumper output, exporters also have a carry-forward stock. All these factor would lead to slightly pushing the prices southwards.”

“Last financial year, the total export of basmati rice from the country was 2.2 mt. In this financial year, the total export during the first six months (April-September) was 1.45 mt which is more or less same as compared to the last year. Also, the average export price was us $1,115 a tonne. At the current stage it is too premature to say about the export price, as new market is also emerging. Even the payment realisation with Iran improves, there would be potential for exports,” he added.

Of the total production, 60 per cent would be of Pusa-1121 variety. It is high yielding variety and the traditional basmati has been replaced by this variety, says exporters.

Senior agriculture officials in Haryana maintained basmati production in Haryana would be identical to last year with 65 per cent of the paddy area transplanted under basmati this year. Tarwari basmati and 1121 are the main varieties of basmati sown in Haryana. The major export destinations are Saudi Arabia, UAE, Iran, Kuwait.