BASMATI RICE INDUSTRY SCENARIO

OVERVIEW OF BASMATI RICE INDUSTRY IN INDIA

Basmati is nature’s gift to Indian sub-continent; its delightful aroma, taste

and texture make it the best among various types of rices in the world. Typically, the delicately curved, long grained, highly scented rice

that is elongated and cooks soft and fluffy is the one which is categorised as basmati and enjoys privileged treatment both in domestic as well as international markets, fetching three times more price.

In the export markets, still the traditional tall basmati variety, Taroari Basmati followed by Basmati 370 and Type 3 (Dehradun) have supremacy over other varieties due to their exclusive quality features. However the evolved varieties of basmati are Pusa Basmati 1121 due to its extra long slender grains along with Pusa Basmati 1, which has carved a niche in the international market.

Mostly basmati is cultivated on the foothills of Himalayas and the whole ambience of the environment bestowing unique properties to this specialty rice. All the festive occasions are complete only with products prepared from basmati such as biryani or pulao served tapping the inherent ambrosial properties of basmati.

Uttaranchal has been reported to be the birthplace of basmati and has huge potential due to its favourable climatic conditions and popularity among the farming community.

Overall production of rice in India is 1,592,00,000 tonne (FAOSTAT 2013 In 2013-14, among various states, Punjab had about 5.59 lakh hectare of area under basmati with annual production of about 14.871 lakh tonne, whereas in Haryana the area under the crop was 7.21 lakh hectare producing 18.90 lakh tonne.

RICE ESTIMATES FOR INDIA(Crop Year: October 2014- September 2015)

PARTICULARS 2013-2014 2014-2015 (ESTIMATED)

OPENING STOCK 19.03 26.78#

PRODUCTION 106.65 104.92

TOTAL IMPORTS 0 0.00

AVAILABILITY 125.68 131.70

TOTAL EXPORTS 10.14 10.10

ENDING STOCK IN CENTRAL POOL

18.34 24.50 €

TOTAL AVAILABLE FOR DOMESTIC CONSUMPTION

97.20 97.10

Source: Department of Food & Public Distribution (DoF&PD), Department of Commerce (DoC), Directorate ofEconomics & Statistics (D&ES), Department of Agriculture & Cooperation (DAC).#: estimates in the beginning of the year. €: estimates at the end of the year.Availability: opening stock in central pool plus production plus Imports; Total Availability for DomesticConsumption: Availability minus (total export plus ending stock in central pool).For preparing estimate for 2013-14, production has been taken as last three years’ average; imports as three years’ average, export as two years average; ending stock as estimated by Department of Food and PublicDistribution.

India’s Trade Flow for Rice during 2009-10 to 2014-15

2009-10 2.02 0.14 0 0

2010-11 2.37 0.10 0 0

2011-12 3.18 4.0 0 0

2012-13 3.50 6.64 0 0

2013-14 3.76 7.0 0 0

2014-15 (Apr-Jan 15)

2.92 6.64 0 0

India’s Trade Flow for Rice

(Unit: Million Tonnes)

Year

Export Import

Basmati BasmatiNon-basmati Non-basmati

Source: Department of Commerce

                                                                                                                                                                                   

               

     FUTURE PRICES   OF RICE   

Contract 9.03.15

week ago 3.03.2015

month ago (09 feb)

3 months ago(09 jan)

6 monts ago (09 oct.)

% change over 6 months

Mar-15 225.53 228.4 230.16 249.56 280.87 -19.7

May-15 231.04 234.13 235.67 254.63 286.16 -19.26

Jul-15 236.55 239.86 241.18 259.48 290.79 -18.65

Sep-15 239.64 243.17 241.4 264.33

Source: Chicago Board of Trade (CBOT)

FUTURE PRICES OF RICE

THE FUTURE PRICES OF RICE WILL DECREASE OVER THE PREVIOUS YEARS AS SHOWN IN TABLE

FUTURE OF INDIA’S RICE EXPORTS

Ministry has restored duty drawback after a span of nearly seven years.

India may become the largest exporter of rice( both basmati and non basmati) next year( i.e. 2015) amid higher demand anticipated from African and Middle East countries and competitive prices and other factors as follows:

Surplus rice stockpiles in the country and improved methods of production have helped position India competitively in the global rice market. With the paddy harvesting season having started earlier this month, local rice prices are expected to fall further.

Ahead of the 2015 general elections in Nigeria, the government is expected to import huge quantities of rice to distribute to domestic consumer as a populist measures. India traders are set to gain.

Prices of rice, including basmati, will fall considerably, which will boost exports.

Iran has proposed a free trade agreement with India to boost bilateral trade and investments.

Indian rice exports to plunge as Thailand offloads stocks: Thailand will open a tender to sell around 1 million tonnes of rice in March, as it tries to shift over 17 million tonnes of rice built up under a controversial subsidy scheme. It aims to sell 10 million tonnes in 2015 and 7 million next year. Indian exporters can compete with private Thai traders, but not with the government as it can cut prices to generate demand for old stock.

REFERENCES

http://articles.economictimes.indiatimes.com/2014-10-08/news/54784844_1_non-basmati-india-rice-exporters-association-global-rice-market

http://www.fnbnews.com/article/detnews.asp?articleid=36925&sectionid=1

http://www.thehindubusinessline.com/industry-and-economy/agri-biz/indian-rice-exports-to-plunge-as-thailand-offloads-stocks/article6951066.ece

http://economictimes.indiatimes.com/news/economy/foreign-trade/iran-talks-free-trade-basmati-imports-with-india-while-hosting-commerce-secretary-rajeev-kher/articleshow/46876026.cms

CRISIL Research :: Special Report - Rice Mills | Rice Mill Report | Rice Mill Analysis

http://www.moneycontrol.com/news_html_files/news_attachment/2013/Rice-Industry-Outlook_CARE_211113.pdf