India struck by floods, Pakistan faces the increase in basmati prices in the middle of harvest losses
Torrential rains and in -depth floods in the Basmati producing regions of India and Pakistan have aroused concerns about the reduction in premium grain production, growing prices up in the middle of the expectations of stricter supplies.
India and Pakistan exclusively cultivate aromatic Basmati rice, which sells for double the price of regular varieties and is mainly imported by Great Britain, the Middle East and the United States.
Floods have seriously affected the Basmati rice harvest, but with the waters in smuggles, losses should remain limited provided that there is no additional precipitation, said Nitin Gupta, Vice-President Director of Olam Agri India.
Northern Punjab and Haryana states contribute more than 80% of the country’s total rice production in the country, while Pakistan’s province of Punjab represents more than 90% of its production.
Strong precipitation at the end of August and earlier this month overflowed the Ravi, Chenab, Sutlej and Beas rivers, flooding these regions.
Initial assessments indicate that crops such as paddy, cotton and legumes on nearly a million hectares have been assigned to Punjab and Haryana, said an Indian government official.
In Punjab province in Pakistan, rice, sugar cane, corn, vegetables and cotton on thousands of hectares were overwhelmed earlier this month.
The floods hit farmers hardly, as well as cultures such as basmati rice and cotton were approached by harvest, said Ibrahim Shafiq, director of exports at Latif Rice Mills Pvt Ltd.
In India and Pakistan, Paddy sowing are generally transplanted in June to July, with harvest from the end of September.
The industry expected an exceptional harvest, but damage is likely to reduce supplies and push prices for Basmati rice, said Shafiq.
“Prudent estimates have brought damage to 20% of cultivated basmati rice in Pakistan … This would definitively increase the price of basmati rice on local markets as well as on international markets,” said Shafiq.
Merchants have increased prices by $ 50 per tonne in last week, and they could still increase if supply shortages remain significant by the end of the harvest, said Gupta d’Olam.
However, some industry officials, including Chela Ram Kewlani, based in Karachi, claim that the current prices increase is temporarily fueled by damage reports caused by cultures and should relax once the harvesting of the new season.
