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Basmati export unit value realisation tops $1,000/tonne in April-May.
Jul 08, 2022

20 per cent jump in value on high demand, prices likely to be firm till September

Helped by lower production and a rise in overall global commodities prices after the Russia-Ukraine war, India’s Basmati rice exports increased 13 per cent in value to $698 million during the first two months of the current fiscal. The per-unit value realisation rose to a six-year high, topping $1,000 a tonne.

The volume of shipments was lower, though. The buoyancy in Basmati prices in export markets is likely to continue until September, by when there will be an indication about the size of the next crop, experts said.

Drop in shipments

There is a jump of 20 per cent in export unit value realisation to $1,019/tonne during April-May against $846/tonne in the year-ago period, according to official data. But shipments have dropped (in terms of volume) by 6 per cent to 6.86 lakh tonnes (lt). 'Current marketing season (October-September) opened with firm demand sentiments for Basmati, which was later influenced by macro factors in order to move FOB prices up. This trend will continue in the short term even if non-tariff barrier distorts the trade,' said S Chandrasekaran, a trade policy analyst.

He said the average export price realisation started this season at $890/tonne in November 2021 and reached $1,021/tonne in May 2022 (up 15 per cent in seven months), whereas in the previous season it started with $805/tonne in November 2020 and was $842/tonne in May 2021 (up 4.6 per cent).

Echoing similar outlook, Vijay Setia, a former president of All India Rice Exporters Association, said in the event of a supply crunch this had to have happened. Last year, there was a massive reduction in the production of Pusa 1121 and Pusa 1509 basmati varieties, which make for the bulk of India’s basmati rice exports, he said. 'Exporters had also slowed their sales after realising that the lower production was pushing prices up. Currently, Pusa 1151 paddy is selling at about ?40,000/tonne, which is a record for basmati. This buoyancy may continue for the next two months as everyone is eagerly waiting to know the next crop size,' Setia said.

Industry sources said about 2-2.5 lt of basmati rice exports got contracted for Iran last month which buoyed the sentiments. Even in local markets, basmati rice which used to be sold at ?40/kg currently commands a price of close to ?60/kg, a huge 50 per cent jump, traders said.

According to official data, India’s basmati rice exports dropped 12 per cent to $3.54 billion last fiscal from $ 4.02 billion in 2020-21. In volume, the fall was nearly 15 per cent at 39.48 lt from 46.3 lt.

thehindubusinessline.com

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