Basmati paddy price firms up on lower harvest, steady demand
The price of basmati paddy - the premier long grain rice in its unshelled form - has increased 30-45% from last year as farmers harvest a lower output in India, the largest producer and exporter, even as demand remains steady globally. Traders expect the price to remain firm through this season.
Unshelled basmati is trading between Rs 26 and 45 per kilogram in Punjab during the ongoing harvesting season. Farmers are receiving higher value this time for 1509 basmati variety as well compared to the last year when it sold around Minimum Support price.
India exports the rice to more than 130 countries. Its price has firmed up after remaining subdued for two seasons. Low prices had led farmers in Punjab, Haryana and Uttar Pradesh to sow less basmati this year.
"A drop of around 7% in area under basmati in India will buttress prices while the international demand is expected to remain stable at around 4 million tonnes,” Basmati Export Development Foundation director AK Gupta told ET. Demand from traditional markets Saudi Arabia, Iran, the UAE and the US is expected to remain normal, he said.
"Steps taken by the Indian government, including restrictions on allowing exports through Documents against Acceptance (a credit arrangement), have also helped push up basmati export prices,” said Vijay Sethia, president of the All India Rice Exporters Association.
By BOA Bureau