Basmati prices lower than 2015's, despite PDS purchases

Prices rise to Rs 1,400-1,500 per quintal after PDS purchases, lower than Rs 2,500 per quintal last year

Procurement of basmati rice by state agencies from Punjab and Haryana, along with normal paddy this year, has not yet improved the market sentiment, with traders reluctant to quote a price higher than that offered by the state agencies.

Though early days, data sourced from Punjab State Agricultural Marketing Board shows that till Friday, around 2.4 million tonnes of paddy had been procured by state agencies, of which basmati rice was 0.15 million tonnes. In Haryana, of the 2.4 million tonnes of paddy, less than 20 per cent was basmati rice.

Before central government intervention, Pusa 1509 basmati was selling at Rs 900-1,100 per quintal, which has now risen to Rs 1,400-1,500 per quintal, but it is less than the Rs 2,500 per quintal a year ago.

“We are yet to get the price we were getting last year,” Gurmeet Singh, a farmer from the Mohali district of Punjab told the Business Standard.

He said the government intervention had helped them to some extent but not what they were anticipating as of now.

“Before government intervention, basmati prices were sold at Rs 900 per quintal. As the state agencies stepped up the procurement process, the farmers were benefited by Rs 300-400 per quintal,” Singh added.

Another problem which some traders pointed out with Pusa 1509 is that, rice recovered from it after milling is less than normal paddy, hence, realisation is still lower. As compared to normal rice, a quintal of Pusa 1509 gives around 52 per cent rice after milling, while in normal rice it is 67 per cent.

Last month, as prices of basmati, especially Pusa 1509, fell sharply, the Centre allowed the state procurement agencies of Punjab and Haryana to buy this paddy variety as Grade A at the minimum support price (MSP) of Rs 1,450 per quintal — the same MSP as non-basmati.

In Punjab and Haryana, bulk of paddy is procured by the state agencies on behalf of  Food Corporation of India  (FCI) annually. Data from FCI show till Friday, 2.9 million tonnes of rice have been purchased by FCI either directly or through the state agencies from across the country in the 2015-16 crop marketing season that started from October, which is 0.93 million tonnes more than last year.

The increase mainly has been due to higher procurement in Punjab and Haryana.