Steady export demand may keep basmati prices firm

AHMEDABAD: Steady export demand and increased buying by domestic traders are expected to keep basmati prices bullish. Production of both traditional and evolved varieties is likely to be 7 million tonne, similar to the previous year's output.

Paddy prices being quoted across markets were higher by 25%-30% compared to last October's, according to Mohender Pal Jindal, president, All India Rice Exporters Association (AIREA). The Pusa 1 variety paddy was being quoted at Rs 2,300 a quintal whereas the Pusa 1121 paddy was quoted at Rs 2,350 a quintal.

"Prices are expected to remain firm in the coming months," he said adding that with a negligible carryover stock of 2-3 lakh tonne, traders and exporters were on a buying spree. Basmati supplies have begun across Amritsar, Batala and Gurdaspur markets in Punjab and Kurukshetra and Taraori markets in Haryana. Supplies will pick up in a fortnight.

"Over 500- 600 quintal of paddy is arriving in all the markets across Punjab and Haryana. Prices have not dropped as the arrival is less," said Om Prakash Arora, a basmati broker, in Karnal.

Unlike the previous year, international merchant Olam International is not expected to purchase basmati paddy this year. "It is a very volatile business and the company will be purchasing basmati rice this year," said a trader in Taraori.

Till Oct 1, over 1.7 million tonne basmati has been exported. The AIREA targets to export over 4 mt basmati rice this year, compared to 3.2 mt last year. Basmati is quoted at $950 a tonne CNF for November-December shipment, compared to $850 last year.