Basmati is the largest product in India’s agri-export basket and accounts for about a fourth of the total farm product shipments. And hence the pearl of India – basmati rice – exports are all to increase for the current fiscal year by a tenth in dollar value terms over last year on higher realisations. However, the volumes are likely to be remain at last year’s levels of four million tonnes.
After a sluggish start during the early part of the fiscal, shipments of basmati have gained momentum over the past couple of months on good demand from key buyers such as Saudi Arabia, Iran and the European Union.
The latest data (for the April-January period) indicate that basmati exports grew by 9 per cent in dollar value to $3.6 billion as against $3.31 billion in the same period last year. However, in rupee terms the growth was higher at ₹24,919 crore (as against ₹21,319 crore last year) at close to 17 per cent for the period, aided by a weaker rupee.
In volume terms, the shipments for the period were marginally higher at 3.36 million tonnes as against 3.27 mt. So far, average per-unit realisations have been about 6 per cent higher at $1,070 per tonne as against $1,010 per tonne in the previous year.
According to A.K. Gupta, Director, Basmati Export Development Foundation, under the Agricultural and Processed Foods Exports Development Authority (APEDA), “The sentiment for exports is good. Going by the current trend, the prices will remain good. We expect a 10 per cent growth in dollar value terms”. Basmati exports during 2017-18 stood at 4.05 mt valued at $4.17 billion.
Vijay Setia, President of the All India Rice Exporters Association said the export volume may remain unchanged at around 4 mt, while there could be 10-15 per cent growth in value terms.
Setia said the higher realisation was driven primarily by higher raw material prices this year. Basmati paddy prices were 10-15 per cent higher this year on reports of a lower crop. However, Setia said there is no shortage of the cereal as such and market arrivals of the paddy were still on in the major mandis of Haryana and Punjab.
Further, Setia also said that Iran has re-opened its markets for import of basmati rice after the seasonal curbs imposed to protect its domestic growers during the harvest season.
While the shipments of the aromatic basmati rice are gaining traction, the growth trend witnessed in non-basmati rice in recent years has not been sustained this fiscal.
Non-basmati shipments were down 18 per cent in dollar value terms during the April-January period over the corresponding period last year.
An increase in the support price for the common variety of paddy has made Indian non-basmati rice expensive in the world market. Also the higher duty imposed by Bangladesh on rice imports has impacted shipments.