Mandi prices of various basmati paddy varieties in India have witnessed a significant surge, ranging from 11 to 14 per cent, just one month after the government’s decision to reduce the minimum export price (MEP) of basmati rice to USD 950/tonne, aiming to stimulate exports.
Exporters attribute the increase in basmati paddy prices to robust global demand, particularly from the Middle East, coupled with restrictions on non-basmati rice varieties exports, driving up prices during the peak arrival period.
At the Karnal mandi in Haryana, the primary hub for basmati paddy trade in the country, the Pusa 1121 variety, which holds a major share in basmati rice exports, is now fetching farmers between Rs 5,000-5,100/quintal. This is a notable increase from the previous year’s prices of Rs 4,500-4,600/quintal.
Similarly, short-duration Pusa basmati 1509 paddy prices are currently in the range of Rs 4,000/quintal, compared to Rs 3,500/quintal last season. Even the Pusa basmati 1718 variety, resistant to bacterial leaf blight disease, is being purchased at Rs 4,700/quintal, up from around Rs 4,100/quintal last year.
According to industry experts, the demand for basmati rice from traditional markets such as Saudi Arabia, Iran, and the United Arab Emirates remains strong. Additionally, there has been encouraging demand from Iraq this season.
Vijay Setia, former president of the All Indian Rice Exporters Association (AIREA), highlighted the positive impact on exports and farmers’ income, stating that paddy prices for basmati varieties are at least Rs 500/quintal higher than last year.
The government’s decision on 26 October to reduce the MEP for basmati rice from USD 1200/tonne to USD 950/tonne, following exporters’ representations, aimed to make exports more viable. The initial higher MEP was imposed in August to curb the potential illegal shipment of non-basmati rice under the guise of premium basmati rice.
AIREA reports that the average export price of basmati rice over the last five years has been USD 975/tonne. In the April-September period of the current fiscal year, India exported 2.3 million tonnes of basmati rice valued at USD 2.6 billion, marking a 14 per cent increase in value compared to the same period the previous year.
For the entire fiscal year 2022-23, the country exported 4.56 million tonnes of basmati rice valued at USD 4.78 billion, with an average price of USD 1,050/tonne.
Geographical Indication (GI) tagged basmati rice is predominantly grown in 70 districts across Punjab, Haryana, western Uttar Pradesh, Jammu & Kashmir, and Uttarakhand. The premium-quality, aromatic, and long-grain rice continues to command a significant share, approximately 75 to 80 per cent, in the global aromatic rice market.
