Basmati’s mandi prices in Haryana, Punjab decline

By Sandip Das Soon after the imposition of minimum export price (MEP) of $1,200/tonne on Basmati rice till October 15, mandi prices of early maturity Pusa Basmati 1509 paddy declined by Rs 500/quintal to Rs 3,300/quintal in Haryana and Punjab on Tuesday.Traders in several mandis of Haryana and Punjab, to whom FE spoke, said that the short duration variety of basmati paddy, which arrives first in the season, was prevailing at around Rs 3,800/tone last week.“Because of the unrealistic level at which MEP has been fixed, if continued beyond October 15, it would pull down the prices further,” a Karnal-based rice exporter said.Officially paddy arrivals pick up in northern states after October 15 and basmati rice exporters said the government must not continue with this high MEP, which could bring down the domestic prices further.A rice exporter, who buys rice from mandis in Punjab, said farmers grow basmati rice because of its higher realisation potential. India has a share of around 80% in the global trade of aromatic rice.“This higher MEP would virtually cripple the export business,” Amit Bansal, a rice exporter from Karnal said. He said there are several consignments in the transit, which had been stopped from shipment and would result in huge financial losses.Basmati rice is grown mostly in Punjab, Haryana, western Uttar Pradesh, Rajasthan, Jammu & Kashmir and Uttarakhand. The aromatic and long grain rice commands a premium in the global market. Out of the annual estimated production of 9 million tonne (MT) of Basmati rice, half of the volume is exported.In the previous fiscal, the country exported 4.56 million tonne (MT) of basmati rice valued at $ 4.78 billion with an average price of $1,050/tonne.According to an official with the All India Rice Exporters Association, the average export price of basmati rice in the last five years has been $ 975/tonne.The MEP for basmati rice and the export duty on parboiled rice until mid- October, commerce ministry officials said, would give the government time to get an estimate of the kharif rice output for 2023-24.Pointing out that the average export price of basmati rice in August has been above $1,200/tonne, a commerce ministry official said, “There has been large variation in the contract price of basmati being exported with lowest price being $359/tonne against the average export price of $1,214/tonne during the current month.”

This article has been republished from The Financial Express.