Lower basmati prices to help exporters

A fall in the price of basmati rice is giving hope to exporters, who are concerned at a fall in shipments abroad this year till date, compared to last year.

Exports in April-July, the first four months of this financial year, were $1.73 billion as compared to $1.81 bn in the same period last year. This is a break in the earlier years' trend - we exported basmati worth $3.2 bn in 2011-12 and $4.9 bn in 2013-14.

As for home prices, they're Rs 2,500-3,000 a quintal, compared to Rs 3,500-4,000 a qtl last year. Millers and traders expect a bigger crop this year (the next crop is expected from next month), as the sown area has gone up in both Punjab and Haryana, due to last year's high price.

Part of the export dip is attributed to Iran, a traditional destination, having raised the import tariff to 45% from the earlier 25%.

The dip in home prices are, therefore, a relief to exporters, since it would help them source the rice for less and enable them to compete better in the international market.

Exporters are exploring opportunities in Kuwait, UAE and Saudi Arabia, to reduce dependence on usual destinations.