Basmati prices to rise 10-15% in first quarter

Rice variant saw 20-25% hike in Nov-Dec on higher paddy prices.

Basmati producers are likely to hike their prices by 10-15 per cent in the first quarter of next financial year. They raised the rates by 20-25 per cent in November-December after paddy prices had shot up on a lower acreage.

On account of higher domestic prices, annual basmati exports may drop 20 per cent to 8.8-9 lakh tonne from the current 11 lakh tonne.

"We have hiked basmati prices by an average 15-20 per cent in November, as paddy prices had jumped 20-25 per cent on lower acreage. The prices may see an increase of 15-20 per cent in May-June. Consumers have absorbed the earlier price hike," said Anil Mittal, chairman and managing director of KRBL, the country's largest basmati-producing company and owner of India Gate brand.

Even after hiking its prices the company has exported about 30,000-40,000 tonne, while its domestic sales too are stable.

"We have recently tied up with Reliance Retail to supply basmati to its stores, and it will only add to our domestic sales," Anup Gupta, joint managing director of KRBL, said.

Currently (after the November-December rise), for exports India Gate Classic basmati is quoting at $1,050-1,100 a tonne, and by May, its price may shoot up by another $100-150 a tonne. The ex-factory price of India Gate Classic was hiked from Rs 41 a kg to Rs 48, and it may move up by Rs 8-10 a kg by May.

"The year-on year sales growth may see a fall after the price hike. While the last quarter was marked by fluctuations in prices, this quarter is largely stable. There will be no price hikes in this quarter. And, before making a hike next quarter, we will review the market," said N C Gupta, vice-president of LT Overseas, the owner of the Daawat brand of basmati. The company had revised the ex-factory price of its Daawat brand from Rs 35 to 45 a kg in November.

"The company is seeing a jump of 20 per in sales even after the price hike by 30 per cent in December. Exports of private labels may come down, but exports of branded basmati will remain unaffected. We are not planning a price hike," said Rajiv Mangla, financial controller of Kohinoor Foods, owner of the Kohinoor brand.