Basmati prices fall as Punjab opens up market to other states

A fall in the price of basmati rice in Punjab has been registered after the Punjab government opened the doors for the millers from other states, driving up the demand for Basmati paddy.

The Basmati paddy price plunged to Rs 2,000 a quintal in the beginning of the kharif season this year, Rs 1,500-Rs 2,000 a quintal lower compared with the corresponding period last year.

Because of the excess milling capacity of Haryana mills and lower price in Punjab, Haryana millers wanted an access to Punjab grain market to optimally utilise their capacities and pick the grain at a more viable price.

The Punjab government is now offering the same concessions to the millers operating outside Punjab as they were offering to local millers. An exemption of one per cent in market fee and one per cent in rural development fund is offered to the Haryana millers to safeguard the interests of the farmers.

This has helped restore the basmati paddy price in the range of Rs 2,300 to Rs 2,600 a quintal, said Vikas Khosla, a rice miller in Haryana.

Haryana farmers are getting Rs 2,600 to Rs 2,950 a quintal for different varieties of basmati.

A fall in basmati price of five per cent to 10 per cent is expected in both the states in November when the harvesting is at its peak.

The basmati acreage in Punjab is 860,000 hectares and is 750,000 hectares in Haryana. An annual crop size of basmati paddy of five million tonne in Punjab and 4.2 million tonne in Haryana is projected this year.

The sharp fall in Basmati price is the outcome of the tepid international demand. But traders expect the demand to revive as the stocks with the Basmati consuming countries may not last for long.