Basmati trade expects better returns this year

More markets coming up and prices are much higher, but excessive pesticide use a growing concern as consignments are getting rejected for this reason

Basmati farmers are expected to get better returns this year due to higher prices in the international and domestic markets. An increase in exports by 10-15 per cent is also expected, over last year.

According to exporters, the current price of basmati rice in the international markets is $1,050-1,100 per tonne (par-boiled) and about $1,350 per tonne (raw) for the PUSA 1121 variety, comprising 75 per cent of total exports. Last year, the price was $750-850 per tonne. In the domestic market, non-branded basmati is Rs 45-50 per kg (par-boiled) and Rs 60-70 per kg (raw rice). Last year at this time, the domestic price was around the same level but it came down drastically to Rs 30-36 per kg (even in some cases, Rs 20-30 per kg) with the new crop’s arrival. This year, traders feel the price will not go down to that level.

Vijay Setia, past president of the All India Rice Exporters Association (AIREA), said, "Besides Iraq, Iran (as a market) is coming up in a big way, which will drive exports. The current prices will be stable because of emergence of new countries for export. The domestic market is also emerging and we expect the prices will be stable."

AIREA executive director Rajen Sundaresan, said, "As both Thailand and USA have suffered drought, India will again be the major rice exporter. It will depend on how our exporters assess the market and get competitive prices. I feel this year there would be an increase of 10-15 per cent in exports compared to last year."

Last year, India exported 3.2 million tonnes of basmati across the globe. In the year before that, it was 2.3 mt.

Exporters say this year’s drought-like conditions didn’t have much impact on basmati transplanting. Rajen added, "Last year, basmati was transplanted in about 1.91 million hectares (ha); this year, it was 1.66 mn ha (provisional). However, there are reports that farmers also opted for direct seeding of rice technology, which requires less water and doesn’t need transplantation. Production would be more or less the same as last year.”

However, millers maintained there would be a decrease in the non-basmati area. Final data is yet to be compiled but as on September 9, the total area under paddy was 35.6 mn ha. Last year, for the whole kharif season, it was 39.1 mn ha.

AIREA says it has also taken an initiative to spread awareness among the farming community in basmati growing belts like Punjab, Haryana, Western UP, Uttarakhand, Himachal, etc, and other stakeholders on the prudent use of pesticides. It has done so to address the growing concern on the rejection of rice consignments on almost a daily basis because of pesticide residues above the permissible limit in the processed grain. In 2011-12, India exported 124,000 tonnes of basmati rice to the US. Value-wise exports were Rs 500 crore. But, says AIREA, roughly 30 per cent of the total exports to the US were rejected due to high pesticide content.

AIREA seniors said: “Controlling the pesticide residue is not in the hands of the exporter or the dealer but the farmer. The right pesticide’s right dose at the right time and right equipment is the only formula that will work. We have, through various meetings, workshops and events been trying to educate farmers about the negative impacts on the incorrect use of pesticides, resulting in the presence of residues even after processing. Most of the pesticides commonly used on paddy in India are not registered in the US. Farmers need to adopt good agriculture practices. This can only happen by generating awareness.”