14% Increase in Basmati Paddy Prices as Arrivals Reach Peak
Published on: December 3, 2023.
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Mandi Prices of Basmati Paddy Rise After Government Lowers Export Price
Mandi prices for various varieties of basmati paddy have increased by 11-14% compared to last year, just one month after the government reduced the minimum export price (MEP) of basmati rice to $950/tonne in an effort to boost exports.
Exporters attribute this increase in prices to robust global demand, particularly from the Middle East, as well as restrictions on the export of non-basmati rice varieties. These factors have driven up the prices of basmati paddy during the peak arrival period.
At the Karnal mandi in Haryana, which is the main hub for basmati paddy trade in the country, the Pusa 1121 variety of paddy, which holds a significant share in basmati rice exports, is now being sold to farmers at Rs 5,000-5,100/quintal. This is higher than the previous year’s price of Rs 4,500-4,600/quintal.
Similarly, the prices of the short-duration Pusa basmati 1509 paddy are currently ranging around Rs 4,000/quintal, compared to Rs 3,500/quintal last season.
Even the Pusa basmati 1718 variety, which is resistant to bacterial leaf blight disease, is being purchased from farmers by traders and exporters at Rs 4,700/quintal, whereas last year’s price was around Rs 4,100/quintal.
Rice exporter Amit Bansal, based in Karnal, predicts that the demand for basmati paddy will remain high throughout the rest of the procurement season due to the surge in exports after the disruption in October caused by a higher MEP of $1,200/tonne. Bansal also mentions that there is encouraging demand for basmati rice from Iraq this season, in addition to traditional markets like Saudi Arabia, Iran, and the United Arab Emirates.
The government’s decision to lower the floor price for basmati rice exports to $950/tonne on October 26, from the previous $1,200/tonne imposed in August, was in response to the exporters’ representation that the high MEP was not feasible for exports.
Vijay Setia, a rice exporter from Karnal and former president of the All India Rice Exporters Association (AIREA), expresses optimism about the higher prices for basmati paddy, stating that it will boost exports and farmers’ income.
The government had initially imposed the $1,200/tonne MEP on basmati rice to prevent the “illegal shipment of white non-basmati rice” in the guise of premium basmati rice, as the shipment of non-basmati rice had been banned since July 20.
According to AIREA, the average export price of basmati rice over the past five years has been $975/tonne.
In the April-September period of the current fiscal year, India has exported 2.3 million tonnes of basmati rice worth $2.6 billion, marking a 14% increase in value compared to the same period last year.
In the 2022-23 fiscal year, the country exported 4.56 million tonnes of basmati rice valued at $4.78 billion, with an average price of $1,050/tonne.
Basmati rice with Geographical Indication (GI) tags is grown in approximately 70 districts across Punjab, Haryana, western Uttar Pradesh, Jammu & Kashmir, and Uttarakhand.
This aromatic and long-grain rice commands a premium in the global market, with India holding a market share of 75%-80% in the global aromatic rice market.
Source: Financial Express
