Basmati rice

Global Scenario

¨ Global rice production in the recent years has fluctuated between 375-400 million tons. Consumption at around 410 million tons has been above production in the recent years.

¨ Global ending stocks, which had average above 120 million tons in the 1990's is currently getting reduced to 80 million tons.

¨ Asia is the biggest rice producer, accounting for 90% of the world's production and consumption of rice.

¨ Per capita rice consumption has declined in recent years in many of the wealthier rice-consuming countries, such as Japan, the Republic of Korea and Thailand, because rising incomes have enabled people to eat more varied diet.

¨ Although rice is widely grown and consumed, less than 6% of world production (20-24 million tons) is traded annually.

¨ Major importing nations of rice are West Asian countries and African countries. Apart from it countries like Japan, Malaysia, and Brazil also figures in top 10 importing country. In West Asia and Middle East Basmati rice is favorite and India is the major supplier in this category.

Indian Scenario

¨ India is the largest producer and exporter of basmati rice in the world. The annual production in the country hovers at around 10-15 lakh tons a year, of which around two-thirds is exported. The remaining is consumed, within the country.

¨ Basmati rice is grown exclusively in the northern part of Western Punjab (on both sides of the Indo-Pakistan border), Haryana and Western Uttar Pradesh. Haryana accounts for around 50% of the area under basmati rice in India, followed by Uttar Pradesh with 25% and Punjab with 18%.

World Trade

¨ In the international market rice is traded under two main categories such as Fragrant and Non Fragrant. In case of fragrant rice, India dominates the trade with its Basmati Rice followed by Pakistan.

¨ Basmati exports from India peak during March-April period and the November-December period.

¨ Gulf region is the major market for Indian basmati rice and inside Gulf, Saudi Arabia accounts for the major chunk of basmati imports from India.

¨ Pakistan is the sole competitor for India in the international market for basmati rice.

Rice Varieties from India

Ø Traditional White Basmati

Ø Sella Sharbathi White

Ø Sella Sharbathi Golden

Ø Non Basmati Rice / White & Brown

In recent years India has started exporting Non Basmati rice in view of large production and huge stockpile of the rice in the storage houses.

Seasons

Approximately 87 percent of total rice production is grown during the kharif /monsoon season, and is dependent on the monsoon rains. Planting was delayed in some areas and a large portion of the now-grain-filling crop is experiencing moisture stress.

Basmati Rice Cultivating Districts of India

Haryana and Punjab	Karnal, Panipat, Kurukshetra, Kaithal, Amritsar, Fatehgar, Gurudaspur, Hoshiarpur, Jalandhar, Patial, Sangrur, Ropnagar
Himachal Pradesh	Kangra, Solan, Una, Mandi, Sirmour,
Rajasthan	Bundi
Uttar Pradesh	Saharanpur, Muzaffar nagar, Pilibhit, Bareily, Bijnour, Moradabad, Jyotibaphule Nagar
Uttaranchal	Rampur, Raibereily, Sitapur, Udham Singh Nagar, Haridwar and Dehradoon
Jammu & Kashmir	In lesser quantities in some areas

Cultivation

India's annual rice production is around 85-90 million tons. However, it fell to 73 million tons due to monsoon rains. Annual consumption is around 85 million tons.

India also annually produces around 6-10 Lakh tons of Basmati rice, more than 70% of which is exported.

India's basmati rice and non-basmati rice exports are valued at US $800 million per annum.

Current Prices

ü Basmati : export price firmed up to $1,750 MT FOB

ü Non basmati: Exports Banned from India right now.

Future Trade prices

The government is thinking a temporary ban on or to Impose Export Duty on export of Basmati rice as part of its drive against inflation.

This would mean to affect on total rice exports as overseas sales of non-Basmati rice have already been stopped, as per news on 15^th April 2008.

Factors that Affects Rice Prices

¨ Changes in the minimum support prices (MSP) by the government also have immense impact on the prices.

¨ Temperature, rainfall and natural calamities like typhoon, floods, droughts and earthquake can also affect crops.

¨ Seasonal cycles are present in agriculture crops, Price tends to be lower as harvesting progresses and produce starts coming into the market. At the time of sowing and before harvesting price tends to rise in view of tight supply situation.

¨ Domestic demand and consumption guide