Indian basmati rice is getting a premium of $20-30 (₹1,550-2,330) per tonne from countries in the Middle East, as rumours spread that New Delhi may put a ban on the export of the commodity to help cool local inflation.
Exporters have received communication from buyers to urgently ship the aromatic, long-grain rice, trade sources said. A firm price trend in global markets has pushed up domestic basmati prices by up to 15% in the last two weeks. The export price of basmati rice, which was $1,200 per tonne in November last year when the crop began arriving, cooled slightly but increased again in the past two weeks to $1,350. Middle eastern buyers are paying the premium over this price.
“We are suddenly witnessing a huge demand from the Middle East,” said Gautam Miglani, who owns Haryana-based basmati rice exporter LRNK. “The buyers are offering exporters a premium for urgent shipping of the grain. Rumours are going around that the government might put an export ban on basmati rice after it had banned wheat exports. This is fuelling the exports.”
India had put curbs on wheat exports earlier this month to control the food grain’s price, which has been rising due to worries over global short supplies amid the Russia-Ukraine war. But traders said there had been no indication of India banning rice exports.
“We do not know from where these rumours of export ban are spreading,” said Vinod Kaul, executive director of the All India Rice Exporters Association.
Lower Production Last Year
“There has been no indication from the government on any such move. But buyers from the Gulf countries are placing good volumes of orders to fill up their own pipeline.”
India produces 8 million tonne (mt) of basmati rice during kharif. Last year, due to unseasonal rains during the harvesting period, the rice got damaged in certain pockets. According to industry estimates, the production of basmati rice last year was around 6,5-7 mt, falling short of the usual output.
Saudi Arabia has emerged as the major buyer, followed by Iran, Iraq and other countries from the region. India had exported 3,94 mt of basmati in FY22.
Competitive Prices
Miglani said apart from the rumours on a possible export ban, rising prices of basmati rice in Pakistan had also prompted buyers from the Middle East to divert a portion of their offtake to India.
The best variety of basmati rice in Pakistan is being sold at $1,450 per tonne, as compared to India’s price of $1,350.
The price of the normal variety of basmati rice is $1,325 per tonne in Pakistan, compared with $1,200 in India.
In the domestic market, top quality basmati is now selling at $3,22 per kg, against $2,96 a fortnight ago, while the normal quality costs $2,83, against $2,45 earlier. Broken basmati rice is sold at $1,80 per kg, against $1,61 two weeks ago. “Prices will rule high till the new crop comes in October-November,” said the chief executive of a leading FMCG firm, who did not want to be named.
Source: economic times
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