Basmati export up on Pakistan floods.

CHANDIGARH: Indian basmati exports get a leg-up as flood-hit top rival Pakistan all but exits the world market. India exports around 3.2 million tonne basmati mainly to Europe and the Middle East and often finds it hard to compete against cheaper basmati from Pakistan. The neighbours exclusively produce aromatic basmati which was once the world’s most expensive rice.

“Indian basmati exporters have got a good opportunity. We will get export orders of over 2 lakh tonne forwarded from Pakistan for the year ahead. There was a spate of buying in August by traders which led to a marginal increase in the prices,” said Dinesh Gupta, MD, Best Food International. The company was India’s second largest exporter of basmati in 2009-10 shipping 1.5 lakh tonne. He added that prices were expected to remain firm owing to an increase in demand in the market and a fall in India production in the month ahead.

As per industry estimates, the prices of Pusa and Pusa 1121 have increased by $30 to $70 in the last one month. Basmati traditional was being quoted at $4,300 per tonne from $3,700 per tonne in June. However, with a carry-forward stock of over 3 crore bags of 50 kg each, there has been no exponential increase in prices this year, said traders.

A recent United States Department of Agriculture report states that Pakistan’s rice output is expected to decline by nearly 40% in 2010-11 to 2.3 million tonnes. Traders said major orders from international companies would come in October and November.

“The current orders are of 500 tonne or 1000 tonne, largely due to international traders’ concern over supply constraints in Pakistan,” said Gurnam Arora, joint managing director, Kohinoor Foods, which exports to 65 countries.

Iran, a major importer of Indian basmati, has stopped issuing new licenses to traders as the Middle East nation is expected to harvest a new crop next month. “We don’t see a major impact as most Iranian traders have already taken the import licences,” said Dinesh Gupta.

Source : economictimes.indiatimes.com