Basmati futures recovered on Tuesday from the 5 per cent loss incurred during the last four trading sessions on fresh buying by stockists in anticipation of the lower-than-estimated production this year. | |
| The commodity gained 5.50 per cent on the MCX to close the day at Rs 3,756 a quintal for January delivery. Basmati rice for December delivery also gained similarly to close the day at Rs 3,764 a quintal. |
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| Since the launch of January contract on November 23, the king of rice had slumped by about 5 per cent to close at Rs 3,561 a quintal on Monday from Rs 3,739 a quintal at the launch of the contract. |
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| The current decline was mainly attributed to the uncertainty over the final output for the season, despite estimates having been released much earlier. |
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| "A gain of 5 per cent in one day is phenomenal, which indicates that the operators are certain of the lower output this year. Stockists are going in for optimum bookings, which indicate that the price would remain firm in the future as well," a trader said. |
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| During the first four days of basmati trade for January delivery, the volume perked up to 320,000 tonne from 80,000 tonne on the day of the inception (November 23). |
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| Stockists, intending to take fresh positions on the commodity, piled up their orders, taking the open position up to 320,000 contracts from 60,000 contracts on the first day. |
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| Rice processors have committed to expand their sales abroad by signing agreements with global retail chains. |
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| Although, the large retailers in the Western countries sell basmati rice of Indian origin, the domestic companies are very keen on expanding their activities further, which is evident from the initiatives taken by the leading producers, including Kohinoor Foods, Usher Agro, KRBL, LT Overseas and others. |
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| Owing to unfavourable climatic condition this year, global basmati rice production is estimated to decline up to 18 lakh tonne from 23 lakh tonne last year, with India's share at 74 per cent. |
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| The balance is contributed by Pakistan, one of the only two major basmati rice producers in the world. In India, branded basmati rice makes up about 33 per cent of the total basmati sales. |
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