Friday, November 12, 2010


Basmati, a long-grain aromatic rice grown in the specific geographical area, at the Himalayan foot hills of Indian sub-continent, has a characteristic of extra-long slender grains that elongate at least twice of the original size with soft and fluffy texture upon cooking, delicious taste, superior aroma and distinct flavour. Thus, basmati rice is unique among other aromatic long-grain rice varieties. This was stated by Dr. J.S.Sidhu, Incharge Agricultural Market Intelligence Center (AMIC) at PAU. He added that with the inclusion of PUSA-1121 rice variety in the basmati category in 2008, the farmers in Punjab are encouraged to put more and more area under this variety to increase their returns. It is largely this variety that has led to doubling of the export of basmati in the last two years, said Dr. Sidhu. As the harvesting of this basmati in Punjab is in progress, farmers are keen to know its expected price. The AMIC gathered and analysed information about some aspects of Basmati rice which will be helpful to the farmers and other stakeholders to make selling and storage decisions

India produces more than 70% of the total world basmati rice and the rest is produced by Pakistan. The production of basmati rice in India was 3 million tonnes ( mt) from 1.4 million hectares (mha) which increased to 4.5 mt during 2009-10 due to 10% jump in area. The states of Haryana, Punjab, U.P, Uttarakhand, and J&K are the basmati growing areas in India. Pakistan produced 2.5 mt of basmati rice during 2009-10 mainly from Punjab and Sindh states.

Discussing the international scenario, Dr. Sidhu said that Saudi Arabia followed by U.A.E., Kuwait, U.S.A, and U.K. is the biggest importer of Indian Basmati rice. It is also exported to other West Asian and European countries. Iran is considered as the biggest buyer of Pusa-1121, that commands almost 50% of basmati exports from India. Export of basmati rice from India has increased from 6 lakh tons in 1998-99 to 1.5 mt in 2008-09 and 3.2 mt during 2009-10. The country's basmati rice exports are likely to rise by 9 % to 3.5 mt, said he. As the crop suffered damage in flood hit Pakistan, the demand for Indian aromatic rice may increase, said Dr. Sidhu. The US Department of Agriculture (USDA) has revised downwards the rice production in Pakistan in 2010-11 to 4.4 mt from 6.5 mt due to floods.

The area under Basmati rice in Punjab which was 3.5 lakh hectare and production 10 lakh tonnes (2008-09) increased to 5.5 lakh hectare and 15 lakh tonnes, respectively (2009-10), said Dr. Sidhu adding that it is further expected to increase to 6.5 lakh hectares and 20 lakh tonnes in 2010-11. The corresponding area in Haryana increased from 5 lakh hectares to 6 lakh hectares and 7 lakh hectares during the same period.

Consequently, there was an oversupply of basmati rice in Indian market leading to fall in prices during 2009-10. According to India Rice Exporters Association, the carryover stock for current year is around 3 lakh tonnes but for the next year it is estimated to be five times higher. The price of Basmati rice is getting quoted between US$ 975-1125 per tonne, quite above the minimum export price of US$ 900. Pakistan, the only competitor of India, is exporting approximately 80,000 tonnes per month with its basmati prices getting quoted at US$ 850. The international demand and production are the major factors influencing the basmati rice prices. The domestic price of basmati rice in Punjab markets remained between Rs. 2400-3400 during Oct-September, 2008-09 and between 1700-2400 during 2009-10.

Based on the analysis of the wholesale prices of basmati that prevailed during the last decade in the important markets in Punjab, the AMIC found that on the basis of current and past market sentiments, traders' opinion and increased supply position, the prices of basmati are expected to prevail in the range of Rs 2000 to 2200 per quintal during November to August, depending upon the export demand and Govt policy. Farmers should keep this information in mind while taking their decisions for selling and storage of Basmati, said Dr. Sidhu.

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