reap_new-logo
About Us  I    Send Feedback  I    FAQs  I    Contact Us
Follow Us:  social-media-icons
Facebook Twitter
 
HomeAbout ReapAbout PakistanAbout RiceNews & EventsPhoto GalleryUseful LinksDownloads
announcement
WELCOME TO OFFICIAL WEBSITE OF RICE EXPORTERS ASSOCIATION OF PAKISTAN
flag text
Facebook Twitter

  About Reap
  Chairman's Message
  About Pakistan
  Managing Committee
  Chairman Archive
  Reap Members
  Reap's Secretariat
  About Rice
  Reap at a Glance
  News & Events
  Photo Gallery
  Useful Links
  Downloads
  Send Feedback
  Contact us
Home > News Updates > News Headlines
News Headlines

BASMATI RICE TO REMAIN COSTLIER THIS YEAR ON LOWER OUTPUT ESTIMATES
9/27/2017

BUSINESS STANDARD (27/09/2017)

BASMATI RICE TO REMAIN COSTLIER THIS YEAR ON LOWER OUTPUT ESTIMATES

The prices of Basmati paddy and rice are likely to remain firm this year due to estimates of lower output, following erratic monsoon rain in major growing regions. Data compiled by the India Meteorological Department (IMD) showed the country’s cumulative rainfall this season was 5 per cent lower than the long-period average (LPA), with the northwest region recording 11 per cent less rainfall until September 20. 

According to industry sources, lower rainfall in major Basmati paddy-growing regions not only hit the overall sowing area but also standing plants in the fields. The price increase might hurt the export of this aromatic rice, a favourable choice for consumers in Iran, Saudi Arabia, and European countries.

“During the current season, there has been rainfall deficit in the key Basmati rice-producing states of Uttar Pradesh and Haryana over the previous year’s monsoon season till mid-September 2017 as well as lower water reservoir levels in Uttar Pradesh. These factors can translate into lower paddy production in the current crop season, and thus the paddy prices are likely to open firm in the oncoming procurement season,” said Deepak Jotwani, assistant vice-president, Icra.

Meanwhile, India’s Basmati rice exports have witnessed a rebound in the current fiscal year, with the first quarter of 2017-18 (FY18) registering a 32 per cent growth in exports contributed by 25 per cent increase in realisations and 7 per cent increase in volumes. This comes after a three-year consecutive decline in Basmati exports till FY17 (Rs 21,605 crore). 

In the past, despite the volumes holding firm, the exports have been adversely impacted by pressure on realisations (from peak of Rs 77,988 a tonne in FY14 to Rs 54,011 a tonne in FY17), driven by lower demand in the global market as well as lower paddy prices over the procurement seasons of FY15 and FY16.

Gurnam Arora, joint managing director, Kohinoor Foods Ltd, said, “Basmati rice is likely to remain firm this year on lower output estimates.”

An Icra report said Basmati rice exports in the current financial year had been encouraging, especially driven by demand from Iran. The West Asian countries are the biggest importers and also a source of volatility in demand. 
 
Demand from Iran, the second-largest importer has been fairly volatile, primarily on account of import bans imposed from time to time. In Q1 FY18, Iran has been the primary contributor to growth in industry exports, contributing around 40 per cent to the total. However, from August, Iran has again discontinued importing Basmati rice from India.
 
The resumption of imports by Iran, which is expected around the procurement season, would be critical for the overall demand for Basmati rice.

Any delays in the same could dampen the paddy procurement in the upcoming season as well as subdue the exports outlook for H2 FY18 and FY19. This is especially important in the light of decline in volume sales from other key market - Saudi Arabia (13 per cent of total exports in Q1 FY18 as against 20 per cent in FY2017, according to the Icra report. 

On the supply side, during the last procurement season of October-December 2016, Basmati paddy prices had firmed up by 20-25 per cent across varieties, on the back of relatively lower production. 

Demand concerns in the form of Iran import ban and sluggishness from other key geographies would be overcome and export volumes in FY18 would be around 4.1 million tonnes. In addition, higher paddy prices in the last procurement season and likelihood of firm prices in the upcoming procurement season are expected to push up the average realisations in FY18. As a result, export value is expected to grow to around Rs 26,000 crore in FY18, a jump of 21 per cent over FY17, it said.

India’s Basmati rice output is estimated to have declined by over 18 per cent to 8 million tonnes for 2016-17. An Icra report said that basmati rice exports in the current fiscal have been encouraging, especially driven by demand from Iran. The Middle Eastern countries are the biggest importers; and also a source of volatility in demand. Demand from Iran, the second largest importer has been fairly volatile, primarily on account of import bans imposed from time to time. In Q1FY2018, Iran has been the primary contributor to growth in industry exports – contributing around 40 per cent to the total. However, from August 2017, Iran has again discontinued importing Basmati rice from India.

HOME
ABOUT REAP
ABOUT PAKISTAN
USEFUL LINKS
OTHER LINKS
MEDIA
 
Ministry of Commerce
Trade Development Authority of Pakistan
Ministry of Foreign Affairs
Official Gateway of Pakistan
Ministry of Finance
Federal Board of Revenue
Security & Exchange Commission of Pakistan
News & Events
  Photo Gallery
  Video Gallery
  Weather
    RSS Feeds
     
       
Copyright 2015 © reap.com.pk - All rights reserved - Developed by: EDCP