Surge in demand pushes Basmati prices to ₹6,500
The price of Basmati in local markets is the highest in nine years
KARNAL: A global surge in the demand for Basmati has caused the prices of the aromatic and long-grained variety of rice to increase in both the international and domestic market, raising exporters’ hopes of harvesting a bumper profit after five years.
As much as 21.57 lakh tonne of Basmati was shipped between April and September against 19.45 lakh tonne in the corresponding period last year. As per the Agricultural and Processed Food Products Export Development Authority (APEDA), the price of Basmati rice touched 1,057 USD (₹86,050) per tonne in September from 1,019 USD (₹82,956) per tonne in May in this fiscal against 853 USD (₹69,442) per tonne in September in the last financial year.
The spike in demand in the international market has not been without local repercussions with the price of Basmati PB 30 touching ₹6,500 per quintal in the Basmati growing belts of Haryana, the highest in nine years. Last year, Basmati PB 30 was sold for ₹4,000 to ₹4,500. Even other Basmati varieties such as Pusa 1121, Sharbati, Duplicate Basmati, Pusa 1509 and Pusa 1718 are being sold for up to ₹4,500, significantly higher than the previous years.
The traders attribute the rise in prices and exports to a sudden spike in demand for Basmati rice in oil-producing countries, including Saudi Arabia, Iran, Iraq, Yemen, UAE, Kuwait, Qatar and Oman, which were recipients of 80% in total Basmati rice exported in 2021-22.
Though the government has imposed 20% duty on rice exports, but traders say that it will not impact their profit as rice prices are at a record high.
All India Rice Exporters Association former president Vijay Setia said, “Exports figures are improving. As the supply chain was affected for the last two years due the pandemic, there has been an increase in demand for food grains across the world. India will achieve its target easily as around 80% of paddy has already arrived in the mandis”
With the Haryana State Cooperative Supply and Marketing Federation Limited (HAFED) also buying paddy directly from the mandis, there is high demand for Basmati in the mandis. HAFED chairperson Kailash Bhagat said HAFED had earned a profit of around ₹207 crores in 2021-22 and it has already got an export order of 20,000 MT basmati rice, valuing 21.85 million USD from Saudi Arabia.
Farmers left out
However, farmers have not profited from the rise in price of rice as harvesting is over and around 85% of the produce has already been sold in mandis. “The increase in prices has not been beneficial for farmers as they have already sold their produce. I had sold Basmati from six acres for ₹ 4,500 per quintal but now the prices are over ₹6,000. This will not benefit to us, just the traders”, said Raghubir Singh, a basmati grower from Karnal.
Moreover, farmers are also complaining about poor yield as the yield of the Basmati varieties have declined to around 10 to 12 quintals from 14 to 16 quintals.
Local buyers at receiving end
Local buyers are also grousing about the rising price of Basmati. “The prices of premium Basmati have increased from ₹100 to ₹120 per kg in the local market. It may rise further after the old stock is sold out,” said a Basmati rice trader in Karnal’s Taroari.