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Basmati Shipments From India to Gain After Pakistan Floods, Exporter Says
Basmati-rice shipments from India may surge by about 22 percent after record floods in neighboring Pakistan destroyed crops, cutting supplies, according to India’s biggest rice exporter.
The country’s overseas sales may advance by about 500,000 metric tons in the year from Oct. 1 from this year’s projected total of 2.3 million tons, KRBL Ltd. Chairman Anil Mittal said from New Delhi today. A ban on shipments from India imposed in 2008 on varieties other than Basmati may be lifted, he said.
The deadliest floods in Pakistan’s history destroyed crops and damaged infrastructure, and that nation’s rice exporters’ group has forecast exports may plunge as much as 35 percent. India’s ban on non-Basmati-rice exports may be ended next month amid a shortage of storage space, Mittal said in an interview.
“We expect rice prices to rise for the next two years in the export markets where India competes with Pakistan,” Nikita Khilani and Arijit Das, analysts at Kolkata-based VCK Share & Stock Broking Services Ltd., said in a note today. “India will capture at least 20 percent of Pakistan’s export market” this year, they said. “KRBL will be among the chief beneficiaries of this scenario.”
KRBL stock, which has more than doubled in the past year, surged as much as 20 percent to 36.45 rupees today in Mumbai, advancing for a sixth straight day. That’s the highest price since at least 2005. The stock may reach 40 rupees, VCK said. Mittal declined to comment on the shares’ jump.
Kohinoor Foods Ltd., KRBL’s rival, rose 15 percent to 62.5 rupees, the most since December 2007, while LT Foods Ltd. jumped 20 percent to 77.7 rupees, a one-year high.
Export Orders
KRBL’s Basmati shipments may gain in value by 20 percent in the year ending March 31 from 9.1 billion rupees ($194 million) in the last fiscal year, Mittal said. After late sowing, the new crop is expected to arrive in the market in mid-October, with Indian sellers getting export orders in November, he said.
“We expect prices to remain strong,” Mittal said, without providing forecasts for the fragrant, long-grain variety. “Over the last three years, new markets in Iraq and Iran have been developed for Indian Basmati.”
India, the second-biggest producer of rice, implemented the trade ban in April 2008 to increase domestic supplies as global rice prices surged to an all-time high. The restrictions remain in place after a drought in 2009 pared production by 10 percent in the year ended June 30.
The government may allow shipments of non-Basmati rice from October as the country may harvest 98 million to 100 million tons of all rice grades in the year to June, Mittal said. “If export is not allowed, there will be problem of storage.”
Limited Quantities
Farm Minister Sharad Pawar said in July that the government may allow exports in limited volumes because of increased sowing. Abhijit Sen, a member of the nation’s Planning Commission said the same month that rice-export restrictions should be lifted.
Pakistan’s record flooding, which has begun to recede in some places, has claimed the homes and livelihoods of 17.2 million people and killed more than 1,500, the United Nations Office for the Coordination of Humanitarian Affairs has said.
Malik Jahangir, chairman of the Rice Exporters Association of Pakistan, has said shipments may drop as low as 3 million tons in the year from July 1 compared with 4.6 million tons the previous year.
To contact the reporters on this story: Pratik Parija in New Delhi at pparija@bloomberg.net; Prabhudatta Mishra in New Delhi at pmishra8@bloomberg.net
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