Comments
For farmers intending to plant basmati – the nursery preparations for which will start now – the ongoing Iran payments imbroglio is not a good augury.
The trade estimates the opening stocks of paddy for the new marketing season from October at around five crore bags (of 50 kg), including three crore of Pusa-1121 and two crore of traditional basmati varieties.
Given annual rice exports of 25 lakh tonnes (lt) or a paddy equivalent of 50 lt, the “normal” opening stock to take care of two months' requirement would be 8.33 lt. That translates into 1.67 crore bags or, say, two crore at the maximum.
That leaves a surplus of three crore bags, the value of which, at last year's average procurement price of Rs 22/kg, comes to Rs 3,300 crore. These stocks are mostly pledged with banks and would have to be milled and liquidated for exporters to be able to repay the loans used to finance their purchases. ICICI, HDFC and Axis Bank are among the banks with major exposure to the basmati industry.
The huge carry-forward stocks from last season would diminish the millers' appetite to procure fresh paddy in the coming season. Last year, farmers got up to Rs 24/kg for Pusa-1121. This time millers may not pay more than Rs 17-18, though this is still more than the likely official procurement price of Rs 11.90/kg for regular ‘Grade A' non-basmati paddy.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.