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Informist, Monday, Aug 26, 2024

 

By J. Navya Sruthi

 

MUMBAI – After a 25% fall this year in basmati rice prices from last year, traders now expect further downside in aromatic rice prices due to prospects of a good crop in the current season (mid-Jun to Oct). Traders expect a 10-12% fall from current prices even before the peak arrival season starts in mid-September. 

 

Prices fell in the last few weeks as arrivals of the 1509 variety started in the market, Devendra Vora, a local wholesale broker, said, adding that prospects of a good crop also weighed on prices. Last year, this time, the price of the 1509 basmati variety was 90 rupees per kg, which is currently 62 rupees a kg, Vishal, a local paddy trader at Malerkotla in Punjab, told Informist. 

 

Last week, prices of the same variety of basmati in Mumbai's Vashi mandi fell nearly 1,000 rupees per 100 kg from 8,000-8,100 rupees. On Friday, the 1509 basmati rice variety was priced at 7,000-7,500 rupees per 100 kg. 

 

Prices of 1509 basmati paddy in Uttar Pradesh have fallen 8% on-month in August to 2,567 rupees per 100 kg so far, according to data available on Agmarknet. On an yearly basis, prices of basmati paddy were down 22% from 3,299 rupees per 100 kg. In Haryana, prices of 1121 basmati paddy have fallen nearly 28% on year and 34% on month to 2,564 rupees per 100 kg in August, the data showed.

 

In 2023-24 (Jul-Jun), India produced 8 mln tn of basmati rice, up 23% from the previous year, according to media reports. Of the 8 mln tn, 5.25 mln tn of basmati rice was exported and half-a-million tn was consumed domestically. The remaining 2.25 mln tn of basmati rice was carried over, reports showed.

 

Further, a high minimum export price for basmati rice has led global consumers of the country’s aromatic rice to shift to Pakistan’s basmati variety, which is available at a cheaper rate, a Delhi-based trader said. The minimum export price for basmati rice is $950 per tn, and parboiled rice attracts 20% export duty. Till the time there is any change in export restrictions on rice, prices of all rice varieties are seen going down, several traders said. 

 

On Friday, quoting a senior government official, Informist said the government is likely to cut the minimum export price of basmati rice to around $850 per tn from the current $950 per tn.  A notification to this effect may be issued within two weeks, the official said.

 

Gaurav Kochar, a rice trader in Madhya Pradesh, expects the government to allow rice exports not any time before December. A few states are yet to host elections and the government doesn't want inflation to rise at this time, he said. Assembly elections in Maharashtra, Jharkhand, Jammu and Kashmir, and Haryana are due later this year.  

 

In July 2023, the government had prohibited the export of non-basmati white rice due to concerns over lower paddy acreage and to control soaring rice prices. However, in December, it allowed exports of non-basmati white rice to some African countries. 

 

After an export ban was imposed on broken variety and non-basmati white rice in September 2022 and July 2023, respectively, India has supplied white rice to a few countries to meet their food security needs based on requests from their governments.

 

Market participants had expected the government to relax the export duty on rice before the Union Budget for 2024-25 (Apr-Mar) on Jul 23. The industry particularly expected the government to cut the floor price for basmati rice exports and set a fixed duty on exports of parboiled rice, given the excess availability of the staple grain in the domestic market. However, their expectations remained unfulfilled.

 

According to the commerce ministry's data, India's basmati rice exports in Jan-Jun rose 24.3% to $3.42 bln from $2.75 bln in the same period last year. In quantity terms, the country's aromatic rice exports rose 24% during Jan-Jun to 3.14 mln tn, the data showed.  End

 

US$1 = 83.85 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Namrata Rao

 

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