Mr. Mohit Gupta –chairman of BHARAT INDUSTRIAL ENTERPRISES LTD interacts exclusively to on the occasion of presenting Riceoutlook magazine of September 2016 issue by our Editor Mr. Tushar Aggarwal. In a candid interaction with Gulshan Rewari- feature editor of the magazine Mr. Mohit Gupta touched upon various aspects of rice industry as a whole.
For the equitable distribution of wealth, rice which provides quarter of the world’s nutrients, would have to play a vital role be it cultivation, processing, packaging, marketing and consumption. For this purpose it becomes imperative that the industry and the government work in perfect harmony. Rice is not recognized as a commodity by the government but a staple food. Therefore we can see that the rice does not figure in stock exchanges as stocks or options and we cannot hedge rice as some of the other commodities. For a sustainable growth of the rice market in India there are number of steps that can be taken both by the government and industry stake holders.
Overview of the present paddy season worldwide
In the northern hemisphere, various countries after harvesting their main crops are now ready to sow offseason crops. World paddy production forecast has been raised by 2.9 million tonnes in 2016 by FAO. This upward revision comes in the wake of improved crop prospects in Asia where weather conditions have enabled cropping activities to unfold considerably better than in the past two seasons. India is in sweet spot among many countries in Asia although the outlook has also improved for Brazil, Cambodia, Colombia, the Islamic Republic of Iran, Nigeria and Thailand. But the prospects deteriorated in China (Mainland), the United States and Vietnam.
Indian Rice forecast
Ongoing paddy price in northern parts of India is in the range of 2200-2250 per quintal but offtake is slow owing to a subdued international demand. But things look to improve for India moving forward with new demand arising out of Iran which has wriggled out of an import ban. Support from government would definitely help by penning new agreements with United Kingdom after Brexit and exploring newer markets. As for India, the estimated demand of rice by 2020 would be around 114 million tonnes from the current level of 105 million tonnes at modest growth rate of 1.6 percent annually. This would enable the country to export approximately 6 million tonnes of non-basmati and 4 million tonnes of basmati. There is a huge potential in India to raise rice production owing to the sizeable under exploited irrigation deficit ecologies and replacing conventional low yielding methods with new technologies like adoption of new generation rice hybrids and submergence tolerant rainfed lowland varieties.
Challenges to achieve these targets
The need to achieve the demands projected for the next several years on a sustainable basis would, however, be a challenge in the face of shrinking natural resources. Ever-growing water scarcity and health of soil and other socio-economic factors like dwindling farm return; labour shortage in the rural areas and volatility of market). Although the unfolding technological innovations would help find solution to such constraints, in the absence of favourable policy environment, the achievement of the task ahead would not be easy. Apart from this the other challenge is the taxation policy or lack thereof. Tax is a major cost to the rice industry. for example 4 percent Mandi tax, service tax on transport of consignments and excise duty on packing material makes our product expansive than the countries like Vietnam, Thailand and Pakistan that have zero tax on exports. But all this would get resolved hopefully but the introduction of GST next year.
Optimism for rice industry going forward
With introduction of GST in the coming financial year all the state and central taxes will merged into one consolidated rate collected at one point. It will create one huge uniform market across the length and breadth of the country which will provide seamless movement of good. This will give impetus to both domestic traders as well as exporters. Further with cost of funds coming down with decreasing interest rates announced by the RBI because of falling inflation a lot of capex is expected in the industry desperately needed for technological upgradation
A brief profile of BHARAT INDUSTRIAL ENTERPRISES LTD (BIEL)
Under the guidance of a young dynamic entrepreneur Mr. Mohit Gupta – BIEL has grown by leaps and bounds to be a dominant organization to become a leading rice mill of northern India. Based in Karnal, Haryana, India, BIEL is manufacturer, exporter, trader and supplier of Basmati and other rice products. Some of their products include Long Grain Parboiled Rice, Enriched Parboiled Long Grain Rice, Long Grain Rice, Brown Rice, White Rice and Short Grain Rice. With extensive knowledge of market functionality, and rich experience, they have been able to carry vast work activities in a hassle-free way. Working on ethical grounds, the sole goal of the company is to serve clients in an economical and transparent way.