Basmati rice production drops, but exports looking up

Though basmati rice output is seen to drop by 10% this year, the export realisation has started looking up since May 2021. However, exporters are apprehensive about possible gains after a steep increase in shipping costs, despite the government’s assistance.

The continuous month-on-month drop in unit value realisation in basmati export started from a peak of $1,107 a tonne in July 2019. But the price realisation in May increased to $ 842 from $ 833 a tonne in the previous month and in August it reached $ 889 per tonne. There was an expectation in the industry that prices might go up over $1,000 a tonne level due to the lower size of the crop.

The drop in basmati output is largely due to an estimated 11% fall to 2.3 million tonnes in the crop in Haryana, the biggest producing state in the aromatic rice variety. Though sowing area under overall basmati declined 3.5% to 7.9 lakh hectare, there has been a steep fall in Pusa 1509, the highest yielding variety, the official said. Other varieties that replaced Pusa 1509 are much lower than its productivity level of 18-22 quintal/acre.

According to Agmarknet data, the average price of Pusa 1509 was in Rs 2,800-3,000 per quintal this month while the total arrivals were to the tune of 2,627 tonne during September 1-26. Last year, prices of Pusa 1509 were Rs 1,800-2,000/quintal in September-October.

The European Union (EU) has also flagged the issue of Tricyclazole, a pesticide residue in Indian basmati rice. Pakistan has gradually increased its share of basmati export to the EU after the pesticide issue emerged as a major bone of contention five years back.

The EU had cut the maximum residue limit (MRL) for Tricyclazole, a fungicide used in paddy crop against ‘blast’ disease, sharply to 0.01 PPM from 1 PPM effective from January 1, 2018. Due to the different varieties grown in Pakistan, its farmers do not need to use Tricyclazole. India’s basmati exports dropped 19% to $ 1.2 billion (Rs 8,975 crore) during April-July this fiscal from the year-ago period. There was a fall in basmati exports in terms of both quantity and unit value realisation. On the other hand, due to increased volume (74% growth), the shipments of non-basmati rice surged 60% to $ 1.9 billion during this period.

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