The anticipation of a bumper production of basmati rice in the major producing belt (Punjab, Haryana and Western Uttar Pradesh) has put pressure on prices and lower prices have helped exports to go up.
Prices have also declined globally and hence, lower domestic prices are helpful to exporters. Exporters are of the view that lower price may push the exports and it can reach three million tonnes this year as compared to 2.2 millions last year.
As per the APEDA data, the actual exports during April-June 2011 was 6.88 lakh tonnes as compared to 4.35 lakh tonnes during corresponding period last year. The total basmati quantity registered with them for export during April-October 2011 was 16.22 lakh tonnes, which is more or less same as compared to last year.
Advisor to Agricultural and Processed Food Products Export Development Authority (APEDA), A K Gupta, said this year exports may go up as prices have declined. APEDA regulates exports of food products.
Speaking to Business Standard and echoing similar sentiments, Kohinoor Foods Ltd joint managing director, Gurnam Arora said, "In the last financial year, total exports of basmati rice from the country was 2.2 million tonnes and this year we are expecting that the total export would touch three million tonnes on account of favourable price."
"In order to boost the exports, we are requesting the government to remove the barrier of minimum export price (MEP) of $900 per tonne so that exporters can compete in the international market," he said. He further added that the government should offer incentives to the exporters in order to boost export from the country, as Iran is emerging as a good market for exports.
It is worth mentioning that area in Punjab and Haryana, the two prominent basmati growing areas, has witnessed an increase in area, with area in Punjab increasing by three to five per cent. In Haryana, basmati crop is sown over 60 per cent of the total cropped area under paddy. Also, expectations are there that this year the total basmati (paddy) production in the country would touch 7.5 million tonnes as compared to 6.5 million tonnes last year.
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Compared to last year, prices are in the range of 15,000-20,000 per tonne. Whereas, last year it was hovering around Rs 21,000-23,000 per tonne.
Vijay Setia, president, All India Rice Exporter Association said, on an average, export prices this year have remained around $850 per tonne as against $1,000 per tonne last year. The depressed prices of basmati would impact the farmers.
Setia said the poor global sentiments are impacting the realisations from exports as inventories piled up with exporters, which is also responsible for low export prices.
According to exporters, there is a carry forward of 15 million basmati bags (1 bag=50 kg) left with the exporters.
Of the total production, 60 per cent would be of PUSA 1121 variety. Already, around 1.05 million tonnnes of basmati has been procured in Punjab and Haryana, which accounts for 60-70 per cent of the total basmati production in the country.
President, Haryana Rice Exporters Association, Sushil Jain, adds, production of basmati in last few years has increased tremendously which is not in equilibrium with the demand.