Amid a global slump in prices of rice, Basmati exporters are hopeful of realising higher prices over last year due to a drop in production of the aromatic rice. However, there may be some indirect impact on increased supply from Thailand which has resumed exports, experts said.

Going by the current market rate of Pusa Basmati 1121 and Pusa Basmati 1509 — the most sought after Basmati varieties — the free-on-board (F.O.B) value of contract happening now is $950-1,000 a tonne, industry officials said. This is higher than $853 realised during April-September of current fiscal as well as $890 in H1 of 2020-21.

In Haryana and Punjab, farmers are selling paddy at about ₹3,500/quintal (Pusa Basmati 1509) and ₹3,700/quintal (Pusa Basmati 1121). Prices of new Basmati crop have gone up from the September level of ₹3,000-3,200 as there is estimated to be 20-25 per cent drop in production of overall Basmati rice in India after farmers reduced the acreage and the buoyancy in rates may continue through September.

“Basmati is not a generic product as it is grown only in small belt of north-western India and Pakistani part of Punjab. There is no competition between prices of Basmati and non-Basmati,” said Vinod Kaul, Executive Director of All India Rice Exporters Association. There is a huge difference between the two rice varieties, he said adding whatever has been shipped so far is last year’s Basmati crop.

Exports, price realisation

India’s Basmati rice shipments declined by 22 per cent to $1.66 billion during the first half of the current fiscal from $2.12 billion in the year-ago period on account of lower volumes.

Non-Basmati rice continued to top the export chart with shipments registering 50 per cent jump in value at $2.95 billion against $1.96 billion in the year-ago. Robust demand for Indian foodgrains has pushed up the agriculture produce exports by 23 per cent to $11.04 billion during H1 FY22 from $8.9 billion in the corresponding period a year ago.

The decline in Basmati exports was largely due to the absence of Iran in the market during a significant part of the first half. With Iran resuming shipments now, exports are likely to gain pace in the days ahead.

As Thailand has resumed exporst, backed by a 20 per cent jump in domestic production overcoming a prolonged drought, prices there have slumped 25 per cent since December — the lowest in the last four years. According to trade sources, Thailand is quoting $390 a tonne FOB for five per cent broken white rice and $650 /tonne for scented jasmine.

“The export supply correction from Thailand and Vietnam are likely to soften the price levels,” said S Chandrasekaran, a trade policy analyst. Though last year Vietnam became an importer, it did not adequately impact global price elasticity, he said and added: “perhaps an appropriate intervention of exporting countries (including India) could have increased the global prices.”

The average price realisation in non-Basmati rice was $361/tonne during April-September of current fiscal as against $384/tonne in the year-ago period. Indian non-Basmati exporters are currently contracting at about $ 340/tonne for 25 per cent broken white, $370/tonne for five per cent broken white and $365/tonne for five per cent parboiled rice, trade sources said. In the overall non-Basmati rice export basket, parboiled variety has 30-40 per cent share.