Basmati perking up

COMMODITY SPIKES

Basmati prices have been perking up unabatedly, baring minor aberrations. The commodity surged 17 per cent in the last fortnight in the wake of a production shortfall estimated by major players.

One of the few grain varieties with an international focus, basmati rice for January delivery gained 5.55 per cent on Multi Commodity Exchange (MCX) on Saturday to close at Rs 4,090 a quintal as against its opening price of Rs 3,483 a fortnight ago on November 30.

In the spot market, branded varieties by leading producers, including Kohinoor Foods, L T Overseas and Amira Foods, are being sold higher at about 35 per cent this year at an average price of Rs 70-75 per kg. The spurt in prices has mainly been attributed to the uncertainty over the output for the season, despite estimates having released much earlier. "A gain of 5.55 per cent in one day is phenomenal. This 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 future as well," a trader said.

As the December contract has been settled on Friday, the January contract would gain momentum only next week and the real trend would become evident only then, another trader said.

Rice processors have committed to expanding their sales abroad by signing agreements with global retail chains to sell the basmati variety in Europe, West Asia and the US.

Large retailers in Western countries sell basmati of Indian origin. Domestic basmati players are, however, keen on expanding their activities. Leading producers such as Kohinoor Foods, Usher Agro, KRBL, L T Overseas and others are taking steps in this regard.

Owing to unfavourable climatic conditions this year, global basmati rice production is estimated to decline to 18 lakh tonne from 23 lakh tonne last year. India's share in the global market stands at 74 per cent. The remaining is contributed by Pakistan. In India, branded basmati rice makes up about 33 per cent of the total basmati sales.