Basmati occupies a special status in Rice cultivation. Blessed with characteristics like extra- long slender grains that elongate at least twice of their original size with a soft and fluffy texture upon cooking, delicious taste, superior aroma and distinct flavour. Basmati rice is unique among other aromatic long grain rice varieties.
In India, Basmati rice is grown in the specific geographical area, at the Himalayan foothills confined into few states of India. These states are located at northern parts of the country e.g., Punjab, Haryana, Himachal Pradesh, Uttarakhand, Western UP, Delhi, Bihar. There are 34 varieties of Basmati rice been notified under the seeds Act, 1966, to name few globally know and demanded varieties are Basmati 217, Basmati 370, Kasturi, Haryana Basmati, Pusa Basmati, Vallabh Basmati etc.
In India, Basmati rice is mainly grown for exporting purpose. It accounts 75% of global Basmati rice production. In the financial year 2020-21, India exported around 4.6 million tonnes of Basmati rice worth USD 6.5 billion. Whereas comparably if we see from non-Basmati rice, country generated USD 3.5 billion even if exporting 13.8 million tonnes, which is more than doubled amount of Basmati rice exported. So, very clearly the importance of Basmati Rice production in our country can be understood here. Agro-Climatic conditions of the specific geographical area as well as method of harvesting, processing, and aging attribute these characteristic features to Basmati rice, therefore this glistening jewel is an undisputed centre - piece of India’s impressive array of cereals & grains. Blessed with a unique aroma that has given it the deserved sobriquet ‘scented Pearl’.
- STATE WISE BASMATI PRODUCTION
India is the largest producer and exporter of basmati rice in the world. The annual production in the country hovers at around 8 - 12 million tons a year, of which around two-thirds is exported. The remaining is consumed, within the country.
Basmati rice is mostly grown in the traditional areas of north and northwestern part of Indian sub- continent for many centuries. The super-fine best quality of Basmati rice is produced on either side of Indus valley in India.
The total area presently under cultivation of Basmati rice is about 1,563,000 hectares in India and its production estimated at about 5,609,000 tonnes during 2019-20. The largest area under Basmati rice is in the State of Haryana (669,000 hectares) followed by Punjab (553,000 hectares) and then Uttar Pradesh (273,000 hectares). During 2019-20, the State of Haryana contributed 2,490,000 of the total Basmati rice production in the country followed by Punjab at 2,148,000 and Uttar Pradesh at 809,000.
However, the basmati has seen drop of 10% in the output this year, largely due to an estimated 11% fall to 2.3 million tonnes in the crop in Haryana, the biggest producing state in the aromatic rice variety. According to the latest estimates, the basmati rice production in the country will drop further 10% to 8.08 million tonne in 2021-22 crop year (July-June).
|STATE WISE BASMATI RICE SCENARIO – 2019-20
|Area (‘000 Ha)
|RICE CULTIVATING DISTRICTS OF INDIA
|Haryana and Punjab
|Karnal, Panipat, Kurukshetra, Kaithal, Amritsar, Fategarh, Gurdaspur, Basmati Hoshiarpur, Jalandhar, Pataila, Sangrur, Roopnagar
|Kangra, Solan, Una, Mandi, Sirmour
|Saharanpur, Muzaffarnagar, Pilibhit, Bareilly, Bijnor, Moradabad, Jyotibaphule Nagar, Rampur, Sitapur & Rae Bareli
|Udham Singh Nagar, Haridwar and Dehradun
- EXPORTS OF INDIAN BASMATI RICE
Basmati rice is increasingly becoming the choice across consumer groups mainly because of its superior taste and aroma that is highly pleasing to the senses. This gives India huge potential of exporting Basmati rice around the world. Out of the total global rice consumption, global Basmati rice consumption is expected to increase by 5.7%.
Share of Basmati rice in the total Indian rice exports has been hovering in the range of 30% to 40% while non- basmati rice contributes to 60 to 70% of rice exports. India exports Basmati rice to almost 132 countries across the world every year and the major export destinations for Indian Basmati rice are Iran, Saudi Arabia, UAE and Iraq. In 2020-21 India exported 13 million metric Tonnes (MMT) non-basmati rice and around 4.5 MMT basmati rice— which comes to around 17.5 MMT rice. It is more than 37 per cent of the total world export (47 MMT).
India, Thailand, Vietnam, and Pakistan are the main four major rice exporting countries. In the last fiscal year, India’s rice export was more than the cumulative exports of the other three major exporting countries—Thailand, Vietnam, and Pakistan mainly due to the panic buying during pandemic situation.
|QTY IN MILLION TONNES
|U Arab Emts
|U S A
- Basmati exports expected to rise on New Crop arrivals, Buyers get clear picture on the Market situation. However, the area under Basmati, particularly PUSA Basmati-1509, was lower this year, resulting in prices rising by 30 per cent which will benefit to farmers.
- Due to the Panic Buying situation India’s exports of basmati rice to Belgium have increased 60% in the first Nine months of the current financial year, while imports by the Netherlands have almost doubled. Rising demand for basmati rice in these European countries has resulted in a better price realisation for farmers, mainly from the basmati rice-growing areas in Punjab and Haryana. The common variety of basmati rice, 1121 Pusa, which is mostly exported, has been fetching a 15% higher price.
- European Union (EU)
Protected Geographical Indication (PGI), or GI tag Getting the GI tag enables countries holding the right to prevent a third- party from using the tag if their product does not match up to the pertinent standards. This status would provide India a monopoly over basmati rice markets in Europe, as names of products registered as GIs are legally protected against imitation and misuse within the EU and in non-EU countries where a specific protection agreement has been signed.
The GI tag for Indian basmati can boost the country’s exports to the European markets from the current $250 million to $500 million. In 2020-21 Basmati rice provided better returns, at a price of $868 or Rs 63,575/ tonne, which is double the non-basmati rice export price at $366 or Rs 26,800/tonne.
|COMPETING COUNTRIES ANALYSIS FOR NEWER DESTINATION FOR INDIAN BASMATI RICE
|Top 5 Destination Countries
|India’s share in Destination Country’s imports (Lakh Tonnes)
|Share of Competing Country’s Exports
|United Arab Emirates
|Hong Kong China
According to Union Commerce ministry and All India Rice Exporters Association data, India exported $245.4 million worth of basmati rice to the EU in 2020-21 as against $207 million in 2019-20. In quantitative terms, it was 2.88 lakh tonnes compared to 2.11 lakh tonnes the previous year.
The basmati rice export from India to Iran has plunged from $1,559.63 million in 2018-19 to $590.67 million in 2020- 21. Pakistan is seeking to benefit from India’s falling exports to Iran. Iran may also not start importing basmati rice from India until a political resolution is in place as owing to US economic sanctions, New Delhi stopped importing crude oil from Tehran.
China is relatively new market for Indian exporters, despite of this China has already inspected & cleared 5 additional rice mills in India (from the previous 19) for exporting non-basmati rice & the phytosanitary measures have also been updated to include such exports. If India can continue to prevent pests from infecting, especially the khapra beetle for basmati rice, this can prove to be profitable as well as new routes for basmati also in the long run.
The demand from Saudi Arabia may be flat or slightly lower, further exports from the India will depend on the geopolitical developments. As Saudi Arabia imports half of its basmati requirements from India.
- POST COVID INDIAN BASMATI RICE MARKET
Threat to Indian Basmati rice exports from Nepal and Egypt. Nepal is planning to increase area under aromatic rice and wants to sell it as basmati, which is threat to India’s efforts in getting a geographical indication (GI) for the rice variety. What is likely to work in India’s favour is that neither Pakistan nor Nepal has filed a claim over the basmati variety, and both have merely filed objections. India, meanwhile, has followed the proper procedure for several years for the GI. “Basmati GI can be granted to India, and EU may decide later if at all there is any claim filed by Pakistan. Nepal has been growing aromatic rice like many other states outside the basmati zone, but all aromatic rice cannot be termed basmati.
Egypt plans to start cultivating basmati rice to cut the country’s $100 million annual import of the aromatic staple. Egypt may not be able to export to Europe since India has obtained a Geographical Indication (GI) tag for its Basmati rice there. But it could face problems if Cairo ships out the fragrant rice to nearby countries such as Syria, Jordan, Iran, Iraq, United Arab Emirates and Saudi Arabia.
Higher ocean freight rates and shortage of containers continue to hamper Basmati rice exports from India. Basmati rice exports from India dropped by about 15 per cent during the April-September period of the current fiscal compared with the same period a year ago. Ocean freight charges have increased by 300 per cent year-on-year on revival of demand for goods, after a slump witnessed during the Covid pandemic. Empty supply pipelines caused by lockdowns, have also contributed to the surging demand. This has also led to a shortage of containers. Some exporters have resorted to exporting commodities using break bulk ships, but their availability is low. According to APEDA data, Basmati exports during April-July were 1.43 million tonnes (mt) valued at ₹ 8,975 crore, compared with 1.68 mt valued at ₹ 11,342 crore during the year- ago period.
- THE PATH AHEAD...
The report “Rice Industry – Emerging Contours” released in October 2021 is optimistic about the future of the rice industry in compre- hensive rice strategy, with a focus on new systems, technologies, and new rice seed varieties. It lists the government initiatives on bringing about structural changes in the sector and the efficient ways to reduce the extent of depend- ence on the vagaries of the monsoon.
Despite some significant region-specif- ic differences, generic factors such as government support in rice production, favourable monsoon, rising number of rice processing companies and increas- ing exports have positively impacted the Indian rice industry.
The report states that in both kharif and rabi seasons rice production has increased over the years. The total production rose by about 15 per cent between 2013-14 and 2020-21. Rice (including basmati and non-basmati) occupy a major share (more than four- fifth) in the country’s total cereals export basket. Telangana, Tamil Nadu, and Andhra Pradesh constitute over 80 per cent of the total area under paddy cultivation, which rose from 30 lakh hectares in FY20 to 35 lakh hectares in FY21.