Basmati exports may go up by 40%

Iran, Iraq Offset Fall In Demand From Europe & Saudi Arabia; Exports Of Pusa1121 Variety May Rise To 15 LT

 BASMATI rice exports are likely to post growth of nearly 40% in the fiscal year ended March 2009 with increased pick up from Iran and Iraq offsetting the fall in demand from European and Saudi Arabian markets.
    Exports, primarily of the premium variety of Pusa1121, are likely to have grown to 15 lakh tonnes in FY09 up from 11.8 lakh tonnes in the previous fiscal, according to an official from Agricultural & Processed Food Export Development Authority (Apeda). In value terms, said the official, India's basmati exports totalled $1.5 billion in the fiscal year to January 2009.
    Anil Mittal, managing director, KRBL, producer and exporter of India Gate brand of basmati rice, said India is likely to have exported close to 550,000 tonnes of Pusa1121 to Iran against 300,000 tonnes last year and an additional 75-100,000 tonnes to Iraq.
    According to Mr Mittal, the growth in Pusa exports to Iran could be attributed to the $500 per tonne price advantage of the Indian variety compared with the local Iranian brand, Domsiah, which quoted at $2,000/tonne during the previous fiscal. "Lower price and a fall in local production of Domsiah led to a jump in imports of Pusa1121 from India," he said.
    The government included Pusa1121 variety under the basmati category in the previous fiscal, with its exports getting under way from November 2008. Pusa1121 is grown mainly in Punjab and Haryana, two of India's key riceproducing states and contributes over 70% of rice exports from the country. The other variety of basmati rice, Pusa Basmati-1 (PB1), however, lost export share in Europe and Saudi Arabia which imported an equivalent variety from Pakistan, which offered a lower price than India.
    In January 2009, the government scrapped the Rs 8,000-pertonne export tax on basmati rice and also lowered the minimum export price (MEP) by $100 per tonne to $1,100 per tonne. Despite these measures, All India Rice Exporters Association president Vijay Sethia disagrees over a possibility of growth in basmati exports in the previous fiscal. "There could be a growth in value terms because of high prices, but not in volume," Mr Sethia said.
    According to him, basmati rice exports could take a hit on account of the MEP which went up from Rs 48,000 per tonne in FY08 to Rs 55,000 tonne in FY09 despite the government lowering MEP to $1,100 from $1,200 due to a depreciation of the rupee. He feels that basmati rice exports will be close to 1.34 million tonnes (mt) against the trade estimated 1.8 mt in FY08, which is more compared to Apeda figures.