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Thanks to robust demand from Iran and West Asia, Indian basmati rice processing and marketing companies such as KRBL Ltd and LT Foods Ltd have seen their profits surge more than three times over the past three years.
During the same period, most of these companies have more than doubled their revenues on rise in basmati prices.
Strong demand Anil Mittal, Chairman and Managing Director of KRBL Ltd, which sells basmati under the India Gate brand, attributed the growth to robust demand for the company’s brands in both overseas and domestic markets.
“Our growth has nothing to do with Iran as it accounts for a mere 2-3 per cent of our total turnover,” Mittal said, while pointing to the fact that KRBL’s domestic business had tripled in the past three years.
KRBL expects to sustain the growth momentum on the rising demand from overseas and domestic markets. “In the current financial year, we expect growth to be a minimum of 20 per cent,” Mittal said.
Basmati exports have doubled in volume in the last four years to a new high of 4.02 million tonnes. In value terms, exports exceeded ₹28,189 crore, a growth of 48 per cent over last year.
Prices of basmati have almost tripled over the past five years, benefiting growers, rice millers and the trade. Parboiled basmati rice is currently traded at around ₹85 a kg in the wholesale market, while raw rice is hovering around ₹95/kg.
Faster growth overseas Vijay Setia, Director, Chamanlal Setia Exports Ltd, expects overseas shipments of the aromatic rice to grow at a faster pace this year as Indian exporters have turned aggressive reaching out to newer markets in Asia, Africa and Europe.
Basmati exports to countries such as South Africa, Egypt, Azerbaijan, Tanzania, Poland and Ukraine, among others have, more than tripled in the past three years.
“While domestic demand is growing at 10-15 per cent, exports are poised to grow by 20-25 per cent to touch the 5-million-tonne mark in the current fiscal,” Setia said. Reuters reports from Singapore: Thailand is offering 5 per cent broken variety at $360-$380 a tonne, free on board, compared with similar varieties of rice being offered at $395 a tonne in Vietnam, $420 a tonne in India and $430 a tonne in Pakistan.
This is well below prices above $600 a tonne in late 2011 and highs near $1,000 a tonne in 2008.
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