Basmati rice exports fetch lower prices

Basmati Rice Exports Fetch lower Prices

AHMEDABAD: For the first time, India parboiled basmati is selling at a $250 discount per tonne to Pakistan as severe working capital crunch is compelling exporters to liquidate their stocks. Indian basmati rice exporters are now getting queries from Pakistani traders and importers to procure Pusa 1121 variety of basmati rice.

Currently, Indian parboiled traditional basmati is sold for $750 a tonne, 1121 parboiled basmati rice variety for $800 a tonne and brown rice (unpolished) for $700 a tonne. The prices are 15% to 20% lower than the previous year.

Pakistan and India are the only producers of aromatic basmati, which was once the world's most expensive rice. "The Indian basmati prices are at a 5-year low. Apart from lower price, our brand positioning has also been hit in the international market. Already, we are getting queries from Pakistani companies that will procure from us and sell in the Middle East," the All India Rice Exporters Association president Vijay Setia said. He added that the Indian rice exporters had been selling goods on credit, which has lead to a liquidity crunch.

"We are advising exporters to trade through cash against document or issue letter of credit only," he added.

Setia said the price would remain stable for another 3 months with a bumper basmati production of 3.5 million tonne in Punjab, Haryana and Western UP. However, the exports have seen a 10% growth in November compared to the previous year.

"Exports should easily touch 2.5 million tonne this year from 2.2 million tonne during the previous year. Also, the domestic consumption will increase owing to a good crop and carry forward stocks," said Kohinoor Foods joint MD Gurnam Arora.

With the Centre lifting ban on non-basmati rice exports in September, followed by a weak production outlook for most rice-exporting countries, India's share in global rice trade may see a sharp increase. The non-basmati rice committee of the All-India Rice Exporters Association chairman Prem Garg said: "The industry has already signed contracts for 1.2 mt tonne of non-basmati rice and we expect to export 2 mt rice March."

Source : economictimes.indiatimes.com