Low price of basmati rice hurting growers

LAHORE  –  Growers fear that they are not getting return for even input cost due to lower price of Basmati paddy this season.

Growers got good production of basmati rice this year due to increase in cultivation area and extra per acre yield. But availability of carry over stock from the last season has caused exporters to take precautions while purchasing due to less export orders from the EU countries. Paddy (Super), which was opened at Rs 2400 per maund last year, is being traded at Rs 2000-2100 per maund this year. Kainat (1121), which was opened at Rs 2200-2300 per maund last year, is being traded at Rs 1900-2000 per maund this year.

Growers, middlemen and other stakeholders are calling for government intervention such as purchase of paddy or rice by the Pakistan Agricultural Storage and Services Corporation (PASSCO) or the Trading Corporation of Pakistan (TCP) so that the prices can be lifted to suitable level.

Muhammad Adnan and Yaqub Ali, growers harvesting their Basmati crop in village Sadhoke near Lahore, have expressed concern over low price being fetched by the commodity. They were of the view that this price will even not meet their input cost and labour. They said that the government should devise some mechanism to fix the minimum purchase price for rice as well as it does in the case of wheat, sugarcane or cotton.

A progressive grower and exporter, Sami Ullah Naeem said that fixing support price for rice would not be a good option. Instead, he said, the government should take measures for decreasing input cost.

He said that over 2 million tons of Basmati production was expected this year but the price is very low in the market. He said that prices are fixed while keeping in view three factors that are carry forward stocks, current production and demand in the export and domestic markets. He said that Pakistan did not have a carry forward stock for the last three years but last year it had some 10 per cent.

To a question, he said unfortunately there was no department in the country which could have real data and figures. He said that last year exporters exported some 900,000 tons of basmati. There was demand because of fear of food security in the wake of COVID-19 and importers bought more than the routine. However, he said that there was a dip in the demand during the last quarter of current year due to which inventory and capital had stuck.

He also termed the weak financial position of Iran as a factor behind low demand.

Replying to a question about how to bring down the input cost of the farmers, he said that the government has to promote mechanized farming. 

‘We can increase plant population rather double it per acre by using the mechanized rice planters instead of sowing by hand. New seed with better germination rates and service provider companies are also needed which can provide machines on rent,’ he added.

Article source: https://nation.com.pk/17-Nov-2020/low-price-of-basmati-rice-hurting-growers