Basmati Rice in India - Production & Export

Basmati Rice in India - Production & Export
                        by Sajad Ahmad Wani, Sachin Kumar Manhas and Pradyuman Kumar

Rice is a staple food in India.

Overall production of rice in India is 1,592,00,000 tonne (FAOSTAT 2013). According to a report available with the Agricultural and Processed Food Products Export Development Authority (APEDA), it has been found that about 37.572 lakh tonne of basmati rice valued at Rs 29,299.96 crore in India was exported from April 2013 to March 2014.

In the previous season it was only about 34.59 lakh tonne of basmati rice that was exported for Rs 19,409.38 crore by the country's rice exporters. In 2013-14, among various states, Punjab had about 5.59 lakh hectare of area under basmati with annual production of about 14.871 lakh tonne, whereas in Haryana the area under the crop was 7.21 lakh hectare producing 18.90 lakh tonne.

In other words, the demand for biryani in the Middle-East has spurred basmati rice exports from India -- a huge rise of about Rs 9,890.588 crore in 2013-14 as compared to the previous year.  Basmati rice in India is highly favoured and got higher prices as compared to other types of rice in domestic as well as in global markets due to its special aroma, taste and flavour.

Uttaranchal has been reported to be the birthplace of basmati and has huge potential due to its favourable climatic conditions and popularity among the farming community. Basmati is nature’s gift to Indian sub-continent; its delightful aroma, taste and texture make it the best among various types of rices in the world.

Mostly basmati is cultivated on the foothills of Himalayas and the whole ambience of the environment bestowing unique properties to this specialty rice. All the festive occasions are complete only with products prepared from basmati such as biryani or pulao served tapping the inherent ambrosial properties of basmati.

Aromatic rice has been grown by Indian farmers for centuries and has been texted in ancient literature, apart from references to the rice diversity available in the country. A wide variety of aromatic rice diversity exists in the country and not all aromatic types are recognised as basmati.

Typically, the delicately curved, long grained, highly scented rice that is elongated and cooks soft and fluffy is the one which is categorised as basmati and enjoys privileged treatment both in domestic as well as international markets, fetching three times more price.

In the export markets, still the traditional tall basmati variety, Taroari Basmati followed by Basmati 370 and Type 3 (Dehradun) have supremacy over other varieties due to their exclusive quality features. However the evolved varieties of basmati are Pusa Basmati 1121 due to its extra long slender grains along with Pusa Basmati 1, which has carved a niche in the international market.

Rice exports from India

Rice is a staple food in Asia. Its production is also concentrated in Asia. Top ten largest rice producers - China, India, Indonesia, Bangladesh, Vietnam, Myanmar and Thailand are located in Asia. Among them, China and India supply nearly half of the total world rice production, Thailand and Vietnam are the two largest rice exporters (FAOSTAT 2012). Thailand and Vietnam in 2009 exported nearly 48% of total world milled rice exports (FAOSTAT 2012).

Saudi Arabia, the Philippines, Malaysia, Cote d’Ivoire, Iran, Iraq, Cameroon, Brazil, China and Yemen are the 10 largest importers of milled rice. Although most of the largest importers of milled rice in terms of quantity are located in Asia and South Africa, the import values of milled rice in (United Kingdom 10th) and (France 7th) are among the largest in the world (FAOSTAT 2012).

Basmati rice is exported from India to many countries, especially to the Gulf and European countries. Recognising its important role in India’s economy, it has been reported that 24 districts of India have been declared as Basmati Export Zone from Uttar Pradesh, Uttaranchal and Punjab. In Uttaranchal, districts exporting including Udhamsinghnagar, Haridwar, Nainital and Dehradun have been made part of the Basmati Export Zone.

Basmati rice is one of the major exports of India. The values and quantities of Basmati rice are accounted for almost all rice exports from India. As said earlier, major export markets of Indian basmati rice include Saudi Arabia, the United Arab Emirates (UAE) and Iran. About 70% of export of basmati rice is for these three countries from India. Although the exports of basmati rice from India to Saudi Arabia, the UAE, the UK and the US have decreased during the past few years, but exports to Iran, Kuwait, Yemen, Jordan, Iraq and the Netherlands have increased. This implies that not only the Middle-Eastern countries have preferences towards basmati rice, but the preferences seem to increase in recent years.

The steady increase in production of rice and availability of buffer stocks and the growing demand for basmati rice in the international market made India an important rice exporting country of the world.

Fourth position

In the year 2008-09, India has been reported to export about 2.48 mt of rice earning about Rs 11,164 crore. Among the several agro products exported from India, rice alone constituted 30.75% of foreign exchange in the year 2008-09 and India ranks at the fourth position for the export of rice after USA, Thailand, and Vietnam. For a long time before India was not a rice exporting country, success in the production and productivity gains had enabled the country since mid-1980s to attain self-sufficiency in rice.

Exporters from India entered into the world rice trade largely through the export of small quantities of highly priced basmati rice which was less than 5% in mid-1980s. In fact, the worldwide rice trade at that time was also less, only about 4%, which was 11.9 mt of the world rice production of 265.9 mt (on milled rice basis). The quantum of world rice trade also doubled to 27.90 mt by 2001 and to 29 mt by 2008 of which India’s share was around 8.62% while in 2006-07 it was highest (19.8%) (Table 1).

Total rice exports from India were mere 0.38 mt in 1987-88, which grew to 0.53 mt in 1990-91 and elevated to a record scale of 5.51 mt in 1995-96. Later on, it dropped to around 2 mt during 2001 and again rose to 6.46 mt in 2007-08 that is 12 times increase over the quantum India exported in 1990-91.

Similarly the value too rose from Rs 456 crore in 1992 to Rs 11,164 crore in 2008-09 which is a spectacular 24 times increase in foreign exchange earnings. During the last five years, India was within the first five rice exporting countries with Thailand consistently ranking first in world rice exports with 10 mt in 2008. Major contribution by various countries for rice exports include Vietnam (4.65 mt), USA (3.50 mt), India (3.30 mt), Pakistan (3.0 mt), China (0.95 mt), Uruguay (0.78 mt) and others (4.02 mt) (USDA 2008) (Figure 3). Major rice importing countries are South Africa, Nigeria, the Philippines, Iran, Saudi Arabia, Iraq, the EU, Indonesia, Malaysia, Bangladesh and the Ivory Coast.

Table 1: World rice exports - contribution by Asia and India’s share (million tonne)

Period	World	Asia	India	India’s share to world Rice Exports (%)
2000	24.5	18.65	1.9	7.9
2001	27.9	22.29	6.7	23.9
2002	27.6	21.51	4.4	16.0
2003	27.2	21.45	3.2	11.6
2004	28.9	21.98	4.7	16.2
2005	29.1	22.20	4.5	15.6
2006	31.8	25.38	6.3	19.8
2007	29.7	23.37	3.4	11.4
2008	29.0	23.00	2.5	8.62

Areas under cultivation

The cultivation of basmati in India is confined to traditional basmati growing areas in northwest Indian states including Haryana, Punjab, Uttarakhand and western Uttar Pradesh and to a limited area in Delhi, Himachal Pradesh and Jammu and Kashmir.

Cultivation of basmati rice in local area is encountered in Jind, Panipat, Kurukshetra, Karnal, Kaithal, Sonipat, Yamuna Nagar and Ambala districts in Haryana as shown in Table 2. In Punjab, the areas where it is grown includes Amritsar, Gurdaspur, Kapurthala, Patiala, Jalander, Ropar, Nawan, Hoshiarpur, Fatehgarh Sahib and Shehar; in Uttarakhand the districts include Dehradun, Udhamsingh Nagar, Nainital, Haridwar, Saharanpur, Rampur, Bijnor, Pilibhit, Badaun, Moradabad and Muzzaffar Nagar in Uttar Pradesh; Kangra, Solan, Mandi, Kullu and Sirmaur in Himachal Pradesh; and Jammu and Kathua in Jammu and Kashmir.

Of the 25 to 29 mt of rice traded annually in the world market, basmati rice market is less than 10%. But basmati rice captures higher returns as it is priced three times higher (US$ 800-1200 per metric tonne) over non-basmati rice (US$200-400 per metric tonne) in the domestic as well as international markets.

Combination of factors

Nearly 50-70% of basmati rice produced in the country is exported mainly to Saudi Arabia (about 68%), the UAE, UK, Bahrain, Kuwait and so on. In 1978-79, India started exporting with a small beginning and exported about 67,000 tonne of basmati rice earning about Rs 32 crore.

A combination of factors were responsible for India to reach this pinnacle as one of the world’s major rice exporter which include the research efforts in developing suitable varieties and farm management practices which were largely adopted by the farmers. In addition, appropriate steps taken by the government to liberalise trade policy and licensing procedures so as to promote the growth of agricultural exports, All India Rice Exporters Association (AIREA) and APEDA made the efforts and play a major role in promoting Indian agri-exports and the zeal of the exporters in establishing themselves as reliable and dependable suppliers of basmati and non-basmati rice.

Table 2: Major Basmati growing districts in India

Country	State	District
India	Punjab	Amritsar, Gurdaspur, Kapurthala, Jalandhar, Patiala, Ropar, Nawan Shehar, Fatehgarh Sahib, Hoshiarpur
	Uttaranchal	Haridwar, Dehradun, Nainital, Udhamsingh Nagar
	Uttar Pradesh	Pilibhit, Saharanpur, Rampur, Bijnor, Moradabad, Muzzaffarnagar, Badaun
	Haryana	Panipat, Karnal, Kaithal, Kurukshetra, Jind, Ambala, Sonipat, Yamunanagar

International scenario

In the international market, rice is traded under two main groups such as fragrant and non- fragrant. The fragrant rice in India dominates the trade with its basmati rice followed by Pakistan. It fetches good export price in the international markets. Export of basmati from India peaks during March-April period and the November-December period. Main export is the Gulf region for Indian basmati rice and in Gulf, especially Saudi Arabia accounts for the major chunk of basmati imports from India. The next important market for Indian basmati rice is the European Union (EU). On an average roughly about 1.0-1.5 lakh tonne of basmati rice is bought by the EU.

(The authors - Wani is research scholar; Sachin Manhas is M Tech; and Pradyuman Kumar is associate professor; Sant Longowal Institute of Engineering and Technology, Longowal. They can be contacted at sajadwani2013@yahoo.com)