Agri Business

Rice exports to Bangladesh may not have a significant impact on prices in W. Bengal

Shobha Roy Kolkata | Updated on July 04, 2021

As production of kharif paddy is expected to be higher this year

The anticipated surge in demand for non-basmati rice from the neighbouring Bangladesh notwithstanding, rice prices in West Bengal is likely to remain range bound this year on the back of an estimated rise in production and distribution of free rice by government.

According to industry insiders, price of the common variety non-basmati rice in Bengal is down by around eight per cent at ₹2,200-2,250 a quintal this year as compared with ₹2,400-2,500 a quintal same period last year. Price of paddy has been steady at last years’ levels at around ₹1,500-1,700 a quintal this year.

Bangladesh recently floated a tender to buy 50,000 tonnes of non-basmati rice from India. This apart, there is also a good demand for non-basmati rice from India in countries such as Vietnam and Africa.

In 2019-20, Bangladesh imported close to nine lakh tonne of non-basmati rice estimated at around ₹2,600 crore. Though exact figures for 2020-21 were not readily available, industry estimates suggest that exports to Bangladesh would be close to 10-15 lakh tonne.

A major chunk of the rice exported to Bangladesh usually goes from West Bengal and the majority of the export happens between September and February.

“The non-basmati rice exports to Bangladesh may not have a significant impact on prices as government – both centre and state – has been distributing free rice in a big way and this has brought down prices in open market to some extent,” Sushil Kumar Choudhury, President, Bengal Rice Mills Association, told BusinessLine.

Higher Production

Production of kharif paddy, which is the traditional crop of West Bengal, is expected to be higher this year backed by favourable weather conditions and adequate rains, industry sources said.

The State produces close to 10.5-11 million tonne of paddy during the kharif season accounting for nearly 70 per cent of the total production which is estimated to be close to 15-16 million tonnes a year and nearly 14 per cent of the country’s total production.

As per official estimates, West Bengal has 5.8 million hectares under rice cultivation. Though official estimates are yet not available, however, the State is likely to register a higher crop this year. Sowing of paddy is currently underway in Bengal and harvesting is expected to commence by mid-October.

“There have been adequate rains and the weather conditions look very favourable so we are expecting a very good production this year. We also have an adequate stock from last year so we do not expect any significant rise in prices of paddy and rice this year,” said Suraj Agarwal, CEO, Tirupati Agri Trade.

Rice prices may inch up marginally by about two-to-three per cent backed by demand from export markets, he added.

Published on July 03, 2021

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