Basmati prices on upswing in Punjab, with reduction in area hitting supply

Punjab has had a reduction in area under basmati, hitting supply and thus sending basmati prices on upswing

Chandigarh With basmati supplies expected to be constrained with area under its cultivation falling this season, the aromatic variety has seen an upward swing in the prices, crossing over ₹4,000 a quintal, over the past ten days. Last season’s peak season rates ranged between ₹2,500 and ₹2,600 in mandis of Kotkapura, Amritsar, Muktsar, Batala, Fatehgarh Churian and Batala.

Basmati prices on upswing have come after many years in Punjab, say market watches, adding that the other variety Parmal had MSP support. (HT FILE)

Punjab Mandi Board figures show that to date, 8.35 lakh tonne basmati has arrived in mandis against last year’s corresponding figure of 10.75 lakh tonne. “Prices are expected to cross ₹4,500 per quintal, with total arrivals expected to be between 13 lakh tonne and 14 lakh tonne.

“This upswing in prices has come after years and is good for growers, especially when the area under the crop has reduced by 26% over previous season,” said Ashok Sethi, director, Basmati Exporters Association. The area under premium paddy variety basmati this season has shrunk by one-fourth over the previous seasons.

Punjab Remote Sensing Centre (PRSC) figures show that this season, basmati was sown over 4.4 lakh hectare against last year’s area under of 6 lakh hectare, witnessing a steep fall of 26%. The Centre has been studying the cropping pattern over the past four-five years.

Fall in area is attributed to poor economics attached with the premium crop forcing the basmati growers to shift to the Parmal paddy covered under MSP, with 26 lakh hectare is under Parmal. Now, paddy crop sown June-July has matured and is being harvested.

“An acre of basmati yields 18-20 quintal, which is sold at price of ₹2,500 a quintal, for a total sale of 48,000. While the yield of an acre of Parmal variety is 30-32 quintal which sells at a fixed price of 1,940 per acre,” said an official with state’s food and civil supplies department. He adds that parmal fetches per acre value between ₹58,000 to 62,000 per acre witnessing a benefit of Rs. 10,000 to 12,000.

“Prices are expected to see an upward trend this week. There is needs a system to regulate and stabilise prices offered for basmati, so that farmers are not fleeced,” said Surinder Singh, a basmati grower from Batala.

According to Sethi, the fall in prices is due to closure of business with Iran which used to export grain worth ₹12,000 crore from the state. “We hope for more upward swing in the basmati market, once sanctions imposed on Iran by the US are removed; India had also followed the US,” he added.

Annually, basmati export from India is worth ₹34,000 crore, out of with Punjab contributes 40%. The quantum of Indian basmati rice consumed in Saudi Arabia is 50% of import to middle-east; the region itself forms 70% of our country’s export market.