Rice ban impact: Basmati exporters gear up to tap incremental demand

Anticipating an increase in demand, in the context of ban on non-basmati rice shipments, a section of basmati rice exporters have started gearing up themselves by leasing additional warehouse spaces near major ports such as Kandla and Mundra.

While basmati is not an alternative to the non-basmati rice, the trade expects an incremental demand to kick-in for the aromatic rice, if the ban prolongs. India banned shipments of non-basmati rice on July 20 to cool down the rising prices of the cereals, while the move has triggered a panic in the overseas market.

• Also read: Categorise Indian rice as ‘speciality’ and ‘common’ varieties, say traders, exporters

“Lot of basmati players are getting active and we have seen a little inflow of additional cargoes at the port now. We are seeing demand for more storage from some clients, who are anticipating additional demand to come up in view of the ban and want to be prepared with their cargo at the ports to tap any opportunity that’s going to open up,” said Shivan Shah of LP Logiscience, the warehousing division of Liladhar Pasoo.

Shah said LP Logiscience handles about 5 lakh tonnes of basmati rice annually at ports such as Kandla and Mundra for exporters from North India and overseas buyers of the aromatic rice. Besides handling warehousing, LP Logiscience also offers services such as sorting, grading, and packaging for the basmati rice exporters and buyers at its facility in Gandhidham near Kandla.

• Also read: Basmati rice export to get a boost from India-UAE currency trade

Insignificant gain

Vinod Kaul, Executive Director at All India Rice Exporters Association, said there could be a little gain for basmati for some time, but may not be significant as basmati rice is a high-value item when compared with non-basmati rice. Basmati exports registered a 12 per cent growth during the April-June quarter over the same period last year and the growth is likely to be sustained, Kaul said.

Trade analyst S Chandrasekaran said, “Other speciality rice exports from India is too small, that is 1.45 lakh tonnes. The sona masoori is a small and fine grain. Matta rice is a double boiled product with specific taste. Basmati will never fit to the quality consciousness of NRI South Indian consumers.”