Basmati exporters may gain from low paddy prices this year

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New Delhi

Farmers are selling Basmati (paddy) at an average ₹2,200-2,500/quintal with over 15 per cent moisture level this year in Uttar Pradesh. This is causing distress as last year they fetched over ₹3,000/quintal. Uttar Pradesh usually gets Basmati crop first among all the growing States since Pusa Basmati 1509 is comparatively a short duration variety and is transplanted earlier than in Punjab and Haryana.

This will likely help exporters as it will make shipments of the fragrant rice from the country competitive vis-a-vis Pakistan.

“I am expecting the same price as last year I sold at ₹3,200/quintal in my village,” said Devender Singh of Shamli district in Uttar Pradesh. Singh, who had transplanted the PB 1509 variety around mid-May and is hopeful of harvesting after another 15 days, said the yield might fall by a quarter this year as no farmer in the vicinity so far has got more than 3 quintals from one bigha (1 acre=appx 6 bigha) whereas last year it was over 4 quintals.

Bhushan Tyagi, another farmer from Aligarh district who sold PB 1509 variety at Khair mandi at ₹2,500/quintal last week, said there is a drop of 15 per cent in yield from last year and he was not aware about the reasons for the low prices. He said traders did not offer “rates” in the auction at mandi this year and he had to sell as he could not take the crop back home.

Fears of price fall

Singh said he had reduced the Basmati area to 6 bighas this year from 9 bighas last year as he had fear that prices might be lower. “When prices are high in a year, usually next season’s sowing area also goes up and prices crash,” Singh said.

According to the Agmarknet portal, Basmati (in the form of paddy) prices were ruling in the range of ₹2,100-2,600/quintal in Uttar Pradesh during August 1-5.

“We do not know the reasons, but exporters are not ready to buy above ₹2,500/quintal,” said a commission agent in Khair mandi and added that the moisture level is quite high at 20 per cent now. But some traders said that average moisture could be around 15 per cent.

On the other hand, farmers of UP’s Shamli district who sell their produce in neighbouring Karnal mandi in Haryana said the rates are not more than ₹2,400/quintal this year.

Cautious purchase

Explaining the reasons for lower rates, Rajinder Gupta, vice-chairman of the Association of Commission Agents, said millers are cautiously buying as they had incurred losses last year after buying Basmati paddy at very high costs. Besides, supplies are also higher since farmers expanded the area in anticipation of another year of high rates, Gupta said.

India’s Basmati rice exports, allowed at a minimum export price (MEP) of $950/tonne, registered a 16 per cent growth at 965,128 tonnes (worth $1,037 million) in the first two months of the current fiscal against 830,872 tonnes (worth $917 million) a year ago.