Farmers Face Lower Prices and High Moisture Levels
This year, farmers in Uttar Pradesh are selling Basmati paddy at an average of $0,264 – $0,300 per kg, with moisture levels exceeding 15%. This is a significant drop from last year’s prices, which were over $0,360 per kg. Uttar Pradesh typically sees the first Basmati crop due to the early transplanting of the Pusa Basmati 1509 variety, ahead of Punjab and Haryana.
The lower prices this year are causing distress among farmers but may benefit exporters by making Indian shipments more competitive compared to those from Pakistan.
Farmer Experiences and Expectations
Devender Singh from Shamli district in Uttar Pradesh, who sold his Basmati paddy for $0,384 per kg last year, is now facing much lower prices. He expects to harvest in another 15 days but anticipates a yield reduction of about 25%. Similarly, Bhushan Tyagi from Aligarh district sold his PB 1509 variety at $0,300 per kg last week, noting a 15% drop in yield compared to last year. He expressed confusion over the low prices as traders did not offer higher rates at the auction.
Fears of falling prices have led some farmers, like Singh, to reduce their Basmati cultivation area. Singh cut his Basmati area from 9 bighas (2.25 hectares) last year to 6 bighas (1.5 hectares) this year, fearing a price crash.
Exporters Are Also Hesitated
According to the Agmarknet portal, Basmati paddy prices in Uttar Pradesh ranged from $0,252 to $0,312 per kg during early August. Exporters are hesitant to pay above $0,300 per kg due to high moisture levels, which are around 20% but could average at 15%. Farmers in Shamli district who sell their produce in Haryana’s Karnal mandi report similar rates, not exceeding $0,288 per kg.
Rajinder Gupta, vice-chairman of the Association of Commission Agents, explains that millers are cautious this year after incurring losses from buying high-priced Basmati paddy last year. Additionally, increased supply from expanded cultivation areas has contributed to the lower prices.
India’s Basmati rice exports, allowed at a minimum export price (MEP) of $0,95 per kg, have grown by 16%, reaching 965,128 tonnes worth $1,037 million in the first two months of the current fiscal year, compared to 830,872 tonnes worth $917 million a year ago. Despite the challenges faced by farmers, lower paddy prices may enhance the competitiveness of Indian Basmati rice in the global market.