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While the National Spot Exchange Ltd (NSEL) claimed it has 5 lakh tonnes of basmati paddy stocks at its designated warehouses in Punjab and Haryana, the trade believes disposing this may not be easy with the new crop set to arrive in the markets from mid-September.
“There are no buyers at this time, but the choice for NSEL is to have the stocks disposed of now or suffer more losses as prices are bound to come under pressure with an impending bumper harvest,” said a leading Karnal-based rice miller and exporter.
At the average price of Rs 30,000 a tonne received last season, the value of the basmati paddy stocks works out to around Rs 1,500 crore. (According to data put out late on Wednesday night, NSEL had 4.51 lakh tonnes of paddy stocks valued at Rs 1,450 crore.) Currently, the price of the 1121 variety of rice is hovering around Rs 44,000/tonne against Rs 33,000 last year, an increase of 28 per cent.
However, Anjani Sinha, CEO, NSEL, claimed that the paddy stocks have already been sold and that the exchange was waiting for buyers to make settlements and take delivery. He, however, did not disclose the details.
NSEL is facing settlement issues after it suspended trading on July 31, triggering concerns of payment defaults. The Government has asked commodities markets regulator Forward Markets Commission to look into the NSEL issue.
Maintaining that aged paddy has demand among millers, Sinha struck a confident note that the settlement would be made as early as possible.
But the trade is not buying this. “While the prices have steadily gone up, it is strange that the buyers have not lifted the stocks all these days,” one trader pointed out.
Five lakh tonnes of paddy, when processed, would translate into 2.5 lakh tonnes of basmati rice, which is more than twice the annual imports made by the US from India.
The paddy has to be stored under ideal conditions and moisture can affect its quality. Even assuming NSEL takes a 30 per cent hit on the value, it will still be a huge sum, another large exporter said.
According to a trader at Karnal mandi , the trade norm is that almost all millers cover their requirements by purchasing the paddy during the arrival season as they can source the right quality.
> vishwanath.kulkarni@thehindu.co.in
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