Producers worried due to sharp fall in the price of Basmati rice
08-Oct-2024 03:04 PM
Chandigarh. Indian Basmati rice producers are currently facing a financial crisis as the prices of rice have fallen drastically. Compared to last year, the price of Basmati rice has fallen by more than Rs 1500 per quintal. Currently, the market price of Basmati rice has come down to between Rs 2200-2600 per quintal, whereas last year it was between Rs 3500 to Rs 5000 per quintal. The sharp fall in the price of Basmati rice in the markets of Punjab, Haryana and Western Uttar Pradesh has increased the worries and troubles of the farmers. Some farmers are planning to deposit their rice on the roads. This is probably the first time when farmers will have to adopt this path. It is worth noting that there is no minimum support price (MSP) fixed for Basmati rice, therefore government agencies do not purchase it. The price of Basmati rice mainly depends on the demand and purchase of rice millers and rice exporters.
Since there is a fierce competition between India and Pakistan on the front of prices of Basmati rice and the exporters are trying to attract importers by keeping the price of their produce at a competitive level, the farmers have to bear the brunt of this competition. The minimum export price (CAP) fixed for Basmati rice in India and Pakistan has been abolished, therefore the exporters are free to give any offer price. When there will be a compulsion to keep the export offer price of Basmati rice low, then the exporters will naturally not show interest in purchasing rice from the farmers at a higher price.
Due to the wholesale market price of Basmati rice falling below Rs 3000 per quintal, farmers are facing a loss of 20 to 30 thousand rupees per acre. Last year, the average price of Basmati rice was between Rs 4000 to Rs 5500 per quintal, due to which producers were getting good income. During the current year, farmers have increased the area of Basmati rice and its production is expected to increase due to favorable weather. The market is likely to soften further when the new rice starts arriving in large numbers. The Israel-Iran dispute is putting pressure on the prices of Basmati rice. It may take some additional time for the market to stabilize.