shanti agro adAccording to the sources  it has been indicated that Indian basmati rice exporters are concerned of oversupply of stocks from the kharif 2014 crop due to  falling prices and lower demand ahead of the harvest of the kharif 2015 crop, which is likely start  from the end of September month. As per data of the Agricultural and Processed Food Products Exports Development Authority (APEDA), it has been reported that export prices of basmati rice have declined to around $950-1,000 per ton this year which is down about 18% from around 1,220 per ton of last year and these fall in prices are due to excess supplies.

Further, in this regard it has also been informed that there has been an increased in acreage of basmati rice in 2014 kharif season to around 2.13 million hectares from around 1.8 million hectares in 2013, in anticipation of higher prices based on higher returns received for the 2013 crop. It received as much as Rs 4,000 per quintal (around $600 per ton) in 2013-14 crop year (October – September). However, prices fall suddenly to as low as Rs. 1,600-1,700 per quintal (around 4240 – $255 per ton) in the 2014-15 crop year which was partly due to a temporary ban imposed by Iran. This ban by Iran affected about 38% of India’s basmati rice exports and thus all these factors led to an oversupply of stocks. Now the exporters are competing against themselves to clear stocks before the new harvest arrives.

According to the available reports, it indicate that  Iran’s removal of ban on Pakistani rice after the lifting of US sanctions is likely to impact India’s basmati rice exports. Since, the volume of basmati and processing facilities in Pakistan are limited, its increased participation in global market is expected to affect profits of Indian rice exporters. Further, a senior official in APEDA informed that big brands are in a position to insulate themselves from price corrections, however, unorganized brands are likely to be more affected .Thus it has been stressed on the importance of investing in branding in order to retain position in the international market.