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Many large buyers from Turkey land in India to buy basmati rice; prices surge

Synopsis

“The old contracts that were kept in abeyance because of sub-$1200 price per tonne are being shipped now. New orders are pouring in with large buyers from Turkey visiting India to pick up good volumes of basmati rice,” said Vijay Setia, a basmati exporter and past president of All India Rice Exporters Association (AIREA).

The surge in exports of basmati rice is likely to pinch the pockets of Indian consumers.

After India reduced the minimum export price (MEP) of basmati rice to $950 from $1200 per tonne last week, many large buyers from Turkey have landed in India to buy basmati rice resulting in prices surging to $975-$1000 per tonne in the export markets.

Farmers from Haryana, Punjab, and western UP are now getting Rs 3900 per quintal for their basmati paddy crop (1509 variety), a Rs 700 per quintal rise within a week’s time fuelled by heavy demand from the global markets for basmati rice.

“The old contracts that were kept in abeyance because of sub-$1200 price per tonne are being shipped now. New orders are pouring in with large buyers from Turkey visiting India to pick up good volumes of basmati rice,” said Vijay Setia, a basmati exporter and past president of All India Rice Exporters Association (AIREA).

On August 25, the government prohibited the export of basmati rice below $1,200 per tonne to prevent potential instances of “illicit” shipment of regular white non-basmati rice disguised as high-quality basmati rice. It also kept the sub-$1,200 per tonne rice contracts in abeyance and asked the Agricultural and Processed Food Products Export Development Authority (APEDA) to set up a committee to evaluate the contracts.

After several representations by the AIREA to reduce the MEP, the Union commerce and industry minister Piyush Goyal agreed to bring down the MEP to $950 per tonne last week.

“Last week prices of basmati paddy increased by Rs 700 per quintal to Rs 3,900. It is a relief for us as we were staring at a loss since the exporters had stopped buying.” said Vijay Kapoor, a basmati farmer from Karnal. However, Kapoor pointed out, the government should keep a close watch on whether the commission agents, who buy paddy from the farmers, are giving them the right price or not.

The surge in exports of basmati rice is likely to pinch the pockets of Indian consumers. Suraj Agarwal, CEO of RiceVilla, a rice marketing and exporting firm said, “As demand is increasing in the export markets after the reduction in MEP, domestic prices of basmati rice have increased by around 9 percent in the last five days. It can increase further once export contracts start being executed. We are expecting domestic prices to increase by another 10% within a month from now.”

Of the total acreage of 1.7 million hectares under basmati rice, the 1509 variety accounts for about 40% of the area. Exports of basmati rice in 2022-23 stood at 4.5 million, valued at Rs 38,524.11 crore, with the Gulf nations being the major buyers. More than 80% of basmati rice produced in India is exported.@timesgroup.com/Kolkata

After India reduced the minimum export price (MEP) of basmati rice to $950 from $1200 per tonne last week, many large buyers from Turkey have landed in India to buy basmati rice resulting in prices surging to $975-$1000 per tonne in the export markets.

Farmers from Haryana, Punjab, and western UP are now getting Rs 3900 per quintal for their basmati paddy crop (1509 variety), a Rs 700 per quintal rise within a week’s time fuelled by heavy demand from the global markets for basmati rice.

“The old contracts that were kept in abeyance because of sub-$1200 price per tonne are being shipped now. New orders are pouring in with large buyers from Turkey visiting India to pick up good volumes of basmati rice,” said Vijay Setia, a basmati exporter and past president of All India Rice Exporters Association (AIREA).

On August 25, the government prohibited the export of basmati rice below $1,200 per tonne to prevent potential instances of “illicit” shipment of regular white non-basmati rice disguised as high-quality basmati rice. It also kept the sub-$1.200 per tonne rice contracts in abeyance and asked the Agricultural and Processed Food Products Export Development Authority (APEDA) to set up a committee to evaluate the contracts.

After several representations by the AIREA to reduce the MEP, the Union commerce and industry minister Piyush Goyal agreed to bring down the MEP to $950 per tonne last week.

“Last week prices of basmati paddy increased by Rs 700 per quintal to Rs 3,900. It is a relief for us as we were staring at a loss since the exporters had stopped buying.” said Vijay Kapoor, a basmati farmer from Karnal. However, Kapoor pointed out, the government should keep a close watch on whether the commission agents, who buy paddy from the farmers, are giving them the right price or not.

The surge in exports of basmati rice is likely to pinch the pockets of Indian consumers. Suraj Agarwal, CEO of RiceVilla, a rice marketing and exporting firm said. “As demand is increasing in the export markets after the reduction in MEP domestic prices of basmati rice have increased by around 9 percent in the last five days. It can increase further once export contracts start being executed. We are expecting domestic prices to increase by another 10% within a month from now.”

Of the total acreage of 1.7 million hectares under basmati rice, the 1509 variety accounts for about 40% of the area. Exports of basmati rice in 2022-23 stood at 4.5 million, valued at Rs 38,524.11 crore, with the Gulf nations being the major buyers. More than 80% of basmati rice produced in India is exported.

https://economictimes.indiatimes.com/news/economy/agriculture/many-large-buyers-from-turkey-land-in-india-to-buy-basmati-rice-prices-surge/articleshow/104915036.cms QR Code

Published Date: November 2, 2023

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