The Hindu Business Line : Basmati prices may rise further

BASMATI rice prices are poised to rise by Rs 7-8 per kg quality-wise in the next three months, mainly in anticipation of lower crop and steady export demand.

Prominent basmati varieties are Super, Pusa, Basmati-386 and 370.

"The basmati crop is expected to decrease by 35-40 per cent over previous season's bumper crop due to inadequate rains in the northern region. Exact crop size is not yet known. Rice procurement in Punjab is expected to be over by December 15. So far, about 90 per cent has been procured. Overall quality is good," an exporter from Punjab told Business Line.

"Though we have enough old stocks-on-hand, prices are expected to go up as export demand is continuing. India's basmati rice is still commanding premium over our traditional rivals in the international market," he said.

Prices of premium quality basmati are currently being quoted at around $800 per tonne, whereas super quality of Pakistan is quoted around $580 per tonne.

India exports 60 per cent of its basmati rice crop to Saudi Arabia. "The country can export around 3 lakh tonnes of basmati to Saudi Arabia this year," he said.

India's exports to all the traditional Basmati markets such as Saudi Arabia, Kuwait, the UAE and the US. During 2003-04, basmati exports totalled 7 lakh tonnes as against 6.6 lakh tonnes in the previous year.

"European Union (EU) is likely to offer a huge opportunity for Indian Basmati but we have not been able to get full benefit because of lack of level-playing field. EU has levied 180 Euros cess on polished white basmati, while there is no duty or zero duty on brown basmati," another exporter said, who participated in "SAARC Rice Expo 2004".

The three-day event has been organised by the Maharashtra Chamber of Commerce & Industry in association with the Rice Exporters' Association of Pakistan (REAP)

"There is no dispute between India and Pakistan on one thing that basmati rice is a common heritage of two countries. Both countries are virtually enjoying monopoly over basmati exports," Mr Syed Najaf Hussain Shah, Chairman of REAP, said.

"India and Pakistan both are facing same problem of lower rice productivity. We have to join hands to improve productivity in the region as both the countries have huge population and limited land," he said.

"New basmati crop this season is expected to be good. Despite this, prices are expected to remain firm, as export demand is good. However, prices may go down marginally around March 2005 as new arrivals will increase," a Karachi-based rice exporter said.

"Rice is principle food of people of South Asia and are cultivating rice for hundreds of years. Farmers in this region have to maintain health of their soils. However, during the recent times the farmers do not get enough organic manure for their soils, which have adversely affected health of soil. As a result, productivity in rice had gone down," Dr Jayant Patil, former member of Planning Commission, said.