India’s basmati rice exporters may now look east, as China has lifted its barriers on the import of basmati rice from India.
Given that Indian exporters were of late confronted with delayed payments from Iran (the largest importer of basmati from India), the opening of a new market would help them consolidate turnover.
Basmati rice is mainly grown in the Indo-Gangetic belt — Punjab, Haryana and some parts of Uttar Pradesh.
According to J K Suri, chairman of Amir Chand Jagdish Kumar Exports Ltd (Aeroplane brand basmati), Chinese consumers are used to having sticky rice and may not quickly accept basmati. But the branding activities would help change the consumer behaviour.
Suri, whose firm exports to 40 countries, says exports to China will give an additional logistic margin to Indian exporters. Adds I S Gumber, director (finance) of Lakshmi Overseas Ltd: “China is a huge market. We can begin with the Horeca (hotel, restaurant and catering) industry.”
The big hotel chains would be the maiden consumers in China, he notes. “Trade with China may offer the sustainability of exporting in the future, as China has a big population with rising disposable income.”
The changing global propositions have favoured India in the export of basmati, as Pakistan is sending most of its basmati rice to Afghanistan. An Indian exporter has to incur an additional $280 per tonne of logistic cost for exporting to Afghanistan. Exports from Pakistan are largely consumed in Afghanistan; so the competition between the two counties has sapped.
Indian exporters fetch $1,100-$1,350 per tonne (depending on the quality) of basmati rice exports. They export Pusa1121 (a hybrid variety), basmati traditional, Pusa and Jammu rice.
Basmati exports stood at close to 2.2 million tonnes in 2010-11 and 2.5 million tonnes in 2011-12.
According to traders, it is pre-mature to surmise the acreage and output of basmati this year, as sowing has not started. They, however, confirm there has been enough export surplus. The price of basmati in the domestic market is likely to remain between Rs 55,000 to Rs 60,000 per tonne.
Vijay Setia of Rice Exporters Association of India says the Chinese market is under-exploited. The new move, thus, will help the farmers as well as the traders, he adds.
