Basmati crop likely to fetch lower prices on higher supply

  • PTI, Chandigarh
  • Updated: Sep 17, 2014 17:20 IST

Basmati crop is likely to fetch 25-30 per cent lower prices as against previous season's rates on account of higher output expected this season, exporters and rice traders said on Wednesday.

"There is going to be price correction in basmati crop this year as the crop supply will increase with more acreage brought under premium variety of rice especially in Punjab," Kohinoor Foods, Joint MD, Gurnam Arora said.

Arora said the rate of basmati paddy such as PUSA 1121 and 1509 varieties could hover around Rs 25 per kg (Rs 2,500 per quintal) this year as against Rs 35-40 per kg ruled last year.

"Last year, the prices of basmati crop remained quite high. But this year, the prices will not be that much higher," he said.

"Basmati prices will remain depressive this year because of higher output," said industry analyst I S Gumber said.

With the Punjab government emphasising on crop diversification programme, area under basmati crop surged by 55 per cent to 8.62 lakh hectares this year.

With around 30 per cent of total paddy area being under basmati, its output is expected to reach 34 lakh tonne as against 22.65 lakh tonne recorded last season, an official of the Punjab Agriculture Department said.

In neighbouring Haryana, 40 per cent of total area under paddy which is 11.38 lakh hectares is under basmati crop.

Notably, Punjab and Haryana contribute 60-70 per cent of country's basmati production. Industry analysts said oversupply of basmati could dash the expectations of basmati growers in Punjab who are anticipating more than last year's prices for their crop.

Meanwhile, the Federation of Arthiya Associations of Punjab has sought from the Punjab government to exempt traders from charging rural development fund and market fee of 2 per cent each on basmati crop in order to boost crop purchase.

"We are demanding that RDF and market fee should not be charged from traders. This incentive which is currently being given to rice shelling industry will encourage traders to buy more basmati crop," Federation of Arthiya Associations of Punjab, President, Vijay Kalra said.

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