A crash in Basmati rice prices has left Madhya Pradesh farmers worried as the downtrend is reportedly linked to some monopoly export firms, say market experts.
Last year the prices of Basmati paddy peaked to ` 4,000 per quintal and this year they crashed to `2200 per quintal, according to sources. But, this puts Basmati growers at the receiving end as the price drop leaves them little to cheer about with the input cost had already been high in terms of costly fertilizers, seeds and diesel, according to market sources.
Former agriculture director GS Kaushal sees in it as a studied gameplan of a few buying firms. "They have deliberately kept the prices down," he says and corroborates it with his on-field findings which suggest there had not been any surplus production situation in the market as the production had been moderate due to lack of rain.
The low-production situation should have pushed prices up instead, he suggests, hinting at the deeper game.
Market sources partly corroborate Kaushal’s take and say it is likely as low purchase prices make Indian Basmati sell like hot cakes in the international market, fetching fat profits to the exporting firms.
Daawat foods director Rajinder Wadhawan, however, rejects the monopoly angle and says,"The prices of basmati depend purely on international market. If one studies the price trends in the last 30 years, prices crash every five or six years. This seems like one of those years."
Daawat foods is one of the major buyers and exports of basmati rice in the state. According to sources, many farmers had taken to Basmati growing, leaving soybean as the main crop in the Narmada belt, mainly Raisen, Hoshangabad, Sehore and Harda districts after it offered good profit proposition.
This is reflected by the fact that the area under Basmati cultivation in the state increased from 1.8 million hectares in 2013 to 2.1 million hectares in 2014, according to the official figures. However, the drop in the prices have left Basmati growers in the no-man’s land, sources told Hindustan Times.