US Commerce Secretary Gina Raimondo will visit India in March this year accompanied by a high-powered delegation of global CEOs, Union Commerce and Industry Piyush Goyal said on Wednesday.

 

He made this announcement after the conclusion of the 13th India-US Trade Policy Forum in Washington.

 

'I have had a chance to spend time with US Commerce Secretary Gina Raimondo. We have finalised the dates of the next commercial dialogue and the CEO Forum meeting in India around 9th-10th March,' Union Commerce Minister said during a press conference in Washington DC.

 

'She will be accompanied by a very high-powered delegation of global CEOs of large multinational companies,' he added.

 

Besides this, trade talks between the US and India also featured issues concerning resilient supply chains, resolving WTO trade disputes and sustainable finance in connection with clean technology.

 

During the press conference, Goyal also announced the setting up of the Trade Policy Forum Working Group on Resilient Trade to help create sustainable trade relationships between India and US.

 

'We have a shared objective of deepening and broadening a US-India trade relationship. And therefore this new Trade Policy Forum Working Group on Resilient Trade will enable both sides to deepen our dialogue on a range of issues which can help us enhance the resilient supply chains and also help us create sustainable trade relationships,' he said.

 

Addressing the press briefing alongside the Indian ambassador to the US, Taranjit Singh Sandhu, Goyal said a discussion was also held for re-starting Wild Caught Shrimp exports from India to the US.

 

'This was an area that was banned by the US because of the concerns around turtles in the areas where Wild Caught Shrimp was being fished in India. A turtle-excluded device has been designed with the technical support of the NOAA (National Oceanic and Atmospheric Administration) from the US and that design has been accepted by the two countries as a collaborative effort,' he added.

 

Goyal said that Wild Caught Shrimp was a product of good acceptance in the US market, and it has good potential for trade between the two countries.

 

India and US are natural partners and have trade complementarities, long-standing strategic and economic relationships, people to people contact, and both are vibrant democracies too, according to an earlier Union Commerce Ministry release.

 

The two countries are also collaborating under the QUAD, I2U2 (India-Israel/ UAE-USA) and IPEF (Indo-Pacific Economic Framework).

 

Regular exchanges at the leadership level have been an integral element of the expanding bilateral engagement. The outcomes emerging from these visits have been instrumental in further strengthening the multifaceted ties between the two countries.

 

The 12th TPF Ministerial meeting was held on November 23, 2021, after a gap of four years in New Delhi. Working groups were re-activated after the last ministerial. TPF is a platform for continuous engagement between two countries in the area of trade and to further the trade and investment relations between the two countries.

 

Both countries are looking forward to the meeting and confident of making progress on the trade issues. The TPF is chaired by Commerce and Industry Minister from Indian side and USTR from the US side.

About 8 months ago, Prem Tantvare of Piplia Khurd in Maheshwar, Madhya Pradesh went to sell his chilies in the local market. He was happy to some extent with the price of chili in the local market, but when he bought chili powder, he was very disappointed with the high price.

 

He then made up his mind to start his own business for processing chili into chili powder. For this purpose, Prem approached the Department of Horticulture in May-June 2022 to set up his industry with one district one product scheme.

 

Today, Prem Tantvare has started a grinding unit by purchasing chilies from other farmers besides his own. Now Premji is selling not one but five types of chili powder at good prices. From 15 December 2022 till now, he has sold 10 to 15 quintals of chili powder. His buyers include local farmers of the village, traders, and nearby hotels and dhabas.

 

Bought machines worth 14 lakhs

Prem Tantvare told he received a grant from the government in a very short time. Bank officials visited his house and took complete information after which the bankers were satisfied and the case was also approved.

 

He received a 35 percent grant of Rs. 7.18 lakh through the scheme PM Formalisation of Micro Food Processing Enterprises (PMFME) of the Ministry of Food Processing Industries for a total project cost of Rs. 26 lakhs. This amount was received with a 3 percent interest subvention.

The Modi government and the Biden administration are 'thinking big' in terms of their trade and commerce relationship, a top Indian official said Wednesday as he ruled out the previously talked about mini trade deal or a free trade agreement and noted that revoking of GSP is not a priority for New Delhi. The previous Trump administration has revoked the Generalized System of Preferences (GSP) from India. The GSP allows eligible developing countries to export duty-free goods to the US.

 

It is during the previous administration as well that the two countries were on the verge of a mini trade deal, which has now been kicked out of the table. The Biden administration is also not in favour of a free trade agreement which businesses from either side are now talking about.

 

'I think in terms of GSP, I have not heard any significant clamour from the Indian industry. To focus our energies on the GSP issue, I have raised it today with my counterparts,' Union Commerce and Industry Minister Piyush Goyal told reporters at a news conference at the conclusion of the India-US Trade Policy Forum meeting which he co-chaired with US Trade Representative Katherine Tai.

 

'It's an issue, which is probably something that the Congress will have to take a call on. But it's not something which has been high on our priority lists or something on which we spend a lot of time to discuss, it was discussed, but more in passing,' he said.

 

'I have placed on record our requests that GSP should be restored. But I can assure you the trade between the two countries continues to expand very rapidly. I do not think that GSP withdrawal has been to the detriment of our growing trade ties,' the minister said in response to a question.

 

Responding to another question on the mini trade deal, Goyal said 'it was too mini' to really merit any great effort on both sides. 'We have even forgotten most of those issues. We are looking at much, much bigger ambitions in our trade with the US.'

 

'While of course, we are doing free trade deals, we've concluded and entered into force free trade deals with Australia and the UAE. We are in active dialogue with the UK, Canada with Israel, and the EU. The United States is currently not looking at any free trade deals with any country whatsoever, as a matter of their political policy,' the minister said when asked about the prospects of a free trade deal.

 

'The FTA is not on the table,' he asserted.

 

'Rather than that, we are focusing on greater market access. We are focusing on ease of doing business between the two countries, you're looking at, bilaterally, a much larger footprint between the two countries, for trade, investment and business. And therefore, the small mini trade deals have lost relevance today,' Goyal said.

 

Meanwhile, India and the United States on Wednesday launched a new TPF Working Group on Resilient Trade. This new Working Group will enable officials to deepen bilateral dialogue on a range of issues that can enhance the resiliency and sustainability of the trade relationship so that it is better able to withstand current and future global challenges, said a joint statement.

 

During the meeting, Goyal and Tai underlined the significance of the TPF in forging robust bilateral trade ties and enhancing the bilateral economic relationship to benefit working people in both countries. They appreciated that bilateral trade in goods and services continued to rise rapidly and reached about USD160 billion in 2021.

 

Responding to a question, Goyal disagreed that TPF has not been productive in terms of deliverables.

 

'I don't think so. There are market access issues which don't come into the TPF in terms of the detailing. Both Katherine Tai and I decided that we should leave those details for the officials to work on and continuously expand,' he said.

 

Goyal said they both agreed to move beyond the one is to one issue like India will open table grapes for them and the US will open up their country for Indian mangoes. 'That was the level of discussions and that many trade deals that were once upon a time and massaged or in earlier engagements,' he said.

 

'Katherine Tai and I decided that this is not the age and day where we will be looking at literally, that I give you one item you give me one item and we square off issues. I think we both agreed that we should look at the big picture. We should look at what's good for both countries. And at the ministerial level, we set the context in with them, the official should find that day to day solutions,' he said.

 

'We discussed and decided that let's move out of this one is to one ratio based outcomes and look at the big picture. For example, on the big picture when we discussed semiconductor manufacturing, we are looking at a much deeper engagement with the US on semiconductor manufacturing,' the minister said.

 

Several American companies are looking at the big Indian opportunity on defense production, making it competitive, giving an opportunity to tap into the large Indian market, where they are encouraged to make India products and they feel comfortable working with India.

 

'Because unlike other countries, we do not steal technology. We allow you to maintain the sanctity of your technology. We allow you to keep your technology with you. We don't demand technology transfer,' he asserted.

India’s wheat production in the current crop year (2022-23) is likely to touch a record 112 million tonne (MT), an increase of around 5% compared to the previous year, thanks to favourable weather conditions, higher acreage and sowing of climate resilient varieties. Meanwhile, the FCI has decided to undertake open market sale of 2 – 2.5 MT of wheat to the bulk buyers such as flour millers, this month to curb rising prices of the grain. Sources told FE the finance ministry approval for these sales is expected soon.

 

With higher productions easing concerns over the stocks, the ban on exports of the grain may be up for review in March. India banned wheat exports for ensuring domestic supplies in May last year. Wheat retail inflation rose by 17.6% in November 2022 on year.

 

Following the government decision to discontinue the free ration scheme from December 31, 2022, the FCI is likely to have 3 MT of surplus wheat stock by the end of the current fiscal against the buffer.

 

As per latest assessment, the wheat stocks held with FCI by April 1, 2023 would be a comfortable 11.3 MT against a buffer of 7.4 MT.

 

'Sowing of climate resilient varieties, favorable weather conditions currently prevailing and slightly higher acreage under wheat may lead to this year’s wheat production to reach a record 112 MT,' Gyanendra Singh, Director, Indian Institute of Wheat and Barley Research, a Karnal-based institute affiliated to the Indian Council for Agricultural Research, told FE. Singh said that the production may even surpass the 112 MT mark if favorable weather continues till March end.

 

In the current season, area under wheat has touched 33.2 million hectare (MH), against the last five year average sown area of 32.4 MH as per the data released by the agriculture ministry last week. Wheat, a key rabi or winter crop, is mostly grown in Punjab, Haryana, Rajasthan, Uttar Pradesh and Rajasthan.

 

Last crop year (July-June), a sudden rise in temperature in March pulled down the output mainly of late sown crop. 'However, the chances of a repeat of last year’s phenomenon of spike in temperature in March, considered as the grain filling stage of the crops, is unlikely to occur based on experience and views from India Meteorological Department,' Singh said.

 

Climate resilient varieties such as DBW187 and DBW 303 recommended for nearly 75% of the wheat grown area of around 33 MH, can withstand sudden change in temperature and farmers across all the key growing states have been using the varieties. Wheat output in the 2021-22 crop year, as per the agriculture ministry, has declined by around 3% on year to 106.8 MT because of heat waves during the flowering stage of the crop in March.

 

Due to lower production and higher global demand, Food Corporation of India (FCI)’s procurement in the 2022-23 marketing season fell by more than 56.6% to only 18.8 MT against 43.3 MT purchased from the farmers in the previous year.

 

The FCI had earlier stopped sale of wheat in the open market from its stocks for the first time more than a decade in view of a sharp drop in procurement in 2022-23 rabi marketing season and additional allocations of the grain under the free ration scheme.

 

The FCI has fixed Rs 2250 a quintal (excluding transportation cost) as the open market sale scheme (OMSS) price. The FCI’s open market sales stood at 7 MT in 2021-22.

 

'We would like to keep wheat prices under check, prior to the commencement of procurement season which begins from April 1, 2023,' an official said. The MSP announced for wheat to be procured during 2023-24 marketing season (April-June) is Rs 2125/quintal.

 

Sources said that if the mandi prices of wheat prevail far above the MSP, it would adversely impact the government’s MSP procurement drive. According to the department of consumer affairs’ price monitoring cell data, the modal retail price of wheat and flour (atta) on Saturday rose to Rs 28/kg and Rs 35/kg, respectively, fromRs 22/kg and Rs 28/kg six months ago.

The Union Commerce Ministry has suspended duty-free imports of soyabean oil under the tariff rate quota (TRQ) regime for the 2023-24 fiscal in a notification issued late on Wednesday evening.

 

However, duty-free imports of sunflower oil under the TRQ regime will continue. In the case of soyabean oil, imports under TRQ will continue until June 30, the notification said. 

 

On May 24 last year, the Directorate-General of Foreign Trade issued a notification announcing the TRQ allowing duty-free imports of soyabean and sunflower oil until March 2024. The Centre decided to permit 20 lakh tonnes of both soft oils each for the current and next fiscal.

 

Taming inflation

The measure was undertaken in a bid to control soaring edible oil prices in the domestic market and to tame inflation.  

 

Now, the Centre has suspended duty-free imports of soyabean oil under the TRQ regime as edible oil prices across the globe have cooled down and Indian soyabean farmers are holding huge inventory.

 

This is a measure to counter any adverse reaction to the Indian government extending the suspension on derivatives trading of soyabean and its products. 

 

According to the Solvent Extractors Association of India, prices of palm group of oils have declined by about 30 per cent year-on-year, while soybean oil rates have dropped 10 per cent. Sunflower oil prices have slid by 7 per cent.

Prime Minister Narendra Modi on Wednesday had a telephone conversation with the newly elected Israeli Prime Minister Benjamin Netanyahu and invited him to visit India 'at an early date'.

 

'Prime Minister conveyed his warm congratulations to H.E. Mr. Netanyahu for his election as the Prime Minister of Israel for a sixth time and wished him a very successful tenure,' the Ministry of External Affairs (MEA) said in a statement. 

 

Mr. Netanyahu paid a six-day visit to India in January 2018, when he was welcomed by Mr. Modi at the Indira Gandhi International Airport here. The Israeli leader was then accompanied by a 130-member business delegation. Mr. Modi had visited Israel in 2017, when Mr. Netanyahu had welcomed him at the Ben Gurion airport. 

 

'The two leaders expressed satisfaction at the rapid progress in the India-Israel Strategic Partnership in recent years, and agreed on the potential for further strengthening strategic cooperation in a variety of areas. Prime Minister invited H. E. Mr Netanyahu to visit India at an early date,' the MEA said. 

 

India and Israel joined the U.S. and the United Arab Emirates to form the I2U2 — a new regional initiative — in July 2022. The initiative is aimed at increasing cooperation in areas like digital connectivity, agriculture, infrastructure, trade and clean energy.

 

Mr. Netanyahu was sworn-in on December 29, 2022 when he also won a vote of confidence in the Israeli Parliament, the Knesset. Israel’s Ambassador to India Naor Gilon had informed the media in December 2022 of the possibility of the visit by the Israeli leadership to New Delhi.

 

Days after Mr. Netanyahu’s swearing-in, the National Security Minister of his far-right government, Itamar Ben Gvir, walked into the Temple Mount for a brief period on the morning of January 3. Under a status quo formula, the religious location is administered by the Jordanian Islamic Waqf while the Israeli police maintains security at the premises. Mr. Gvir’s visit to the venerated site was criticised by Palestinian groups like the Hamas as well as the U.S. administration. 

 

The religious space which is called Temple Mount by the Jewish side and Haram al Sharif by the Muslim community is a sensitive zone, and has been at the centre of competing claims from both sides in the past. The shrine is considered holy by all the Abrahamic faiths but non-Muslims are forbidden from praying at the location that they can visit only as tourists at designated hours.

 

The site which triggered the first controversy of the Mr. Netanyahu sixth term came under Israeli control after the Arab-Israel war of 1967.

The ministry of food in Bangladesh has started the process of importing 300,000 tonnes of parboiled rice from India. The government will purchase two-thirds of the rice directly from the Indian government in a government-to-government (G2G) transaction. The remaining 100,000 tonnes of rice will be bought through a global import tender.

 

The ministry will procure the rice from four Indian companies and the import process is in its final stage. However, Bangladesh is spending nearly US $40 more per tonne when buying from government-run Indian companies compared to the private traders.

 

A number of Indian media outlets have already ran stories on the discrepancy of the price between government and private companies.

 

A source at the food ministry said the rice the two private companies in India are selling at $393 and $397 per tonne is priced at $433.6 and $436.5 by the two government-run companies.

 

Bangladesh will buy 100,000 tonnes of rice each from the government-run companies and 50,000 tonnes from each of the two private companies. The food ministry and cabinet committee on public procurement has already approved the import order.

 

Food ministry secretary Mohammad Ismail Hossain told Prothom Alo, 'The cost of rice fluctuates in every country. The talks to purchase rice through a governmental transaction began in last October. The talks were finalised in mid-December. The rate was fixed according to the export prices at the time. The global import tender was issued last December. By then, the price of rice had fallen. That’s why we could purchase rice at a lower price.'

 

In December last year, a six-member team led by food minister Sadhan Chandra Majumder and Mohammad Ismail Hossain toured Thailand, Vietnam and Cambodia to seek traders to import rice at a lower rate. But the team couldn’t secure a deal to import the requisite amount. So, the food ministry resumed the process of importing rice from India.

 

A source at the food ministry said that very soon the ministry will sign a deal with India’s National Co-operative Consumer Federation (NCCF) and their central reserves to purchase 100,000 tonnes of rice from each.

 

The directorate general of food issued a letter of intent (LoI) to both the companies on 21 December. Around 70 per cent of the imported rice will be brought via the Chattogram and Mongla ports. The remaining rice will come in trains. The companies are contractually obligated to deliver the rice within 70 days of the signing the agreement.

 

In the global import tender, the two Indian private companies proposed the lowest quotations and were given the contract. The companies are the Singapore-based Agro-Crop International Limited and Bagadiya Brothers.

 

Business Line, a newspaper owned by Indian media house the Hindu group, ran a report on 21 December on the difference of price between the government and private traders. They expressed shock at Bangladesh choosing to buy from the government traders over the private ones.

 

The report said the Indian co-operative traders are getting Rs 330 million more per 100,000 tonnes of rice. In total, the co-operatives will earn an extra Rs 660 million.

 

The report claimed that the government and private traders from India are selling rice at the lowest rate in the current global market and traders in Thailand, Vietnam and Myanmar traders are selling at a higher rate in comparison.

 

Former agriculture secretary AMM Shawkat Ali told Prothom Alo, 'At a time when the country is going through a dollar crisis, the government should purchase rice at the cheapest rate possible. If the price of rice is going down, then they should wait for a bit and then buy rice.'

 

According to the United States Department of Agriculture (USDA), India will be the biggest global exporter of rice in the running fiscal year. China will buy 1.35 million tonnes of rice from India and Philippines and middle-eastern countries are also showing interest to buy rice from India.

 

As per the food ministry, currently around 1.4 million tonnes of rice is stored at government food reserves. The government distributes nearly 200,000 tonnes of rice every month as part of its social security programmes.

 

After the price of rice spiked in the country, the distribution amount was increased to 300,000 tonnes. That’s why, the government is trying to purchase from external sources to replenish the reserve.

The union cabinet on Wednesday approved setting up three multi-State co-operative societies to facilitate export, organic farming and seed distribution.

 

'These institutions will help in achieving the goal of ‘Sahakar-se-Samriddhi’ (Prosperity through Cooperation) through the inclusive growth model of cooperatives,' Union Labour Minister Bhupendra Yadav said in a press conference. Further, he added that these will also be instrumental in improving rural economy.

 

All three will be registered under Multi-State Cooperative Societies (MSCS) Act, 2002.  They can have members from primary to national level cooperative societies including primary societies, district, state and national level federations, multi-State cooperative societies and farmers producer organisations (FPOs). All these cooperatives will have their elected representatives in the Board of the society as per its by-laws.

 

Targeting exports

First of the three, Multi-State Cooperative Export Society, will act as an umbrella organisation for the export of surplus goods/services produced by various cooperative societies across the country with support from relevant Union Ministries. The institution will be promoted with support from relevant Ministries especially the Ministry of External Affairs and Ministry of Commerce and Industry through their export related policies, schemes and agencies by following the ‘whole of government approach’ for undertaking exports of all goods and services produced by cooperatives and related entities.

 

'Higher exports through the proposed society will increase production of goods and services by the cooperatives at various levels thus leading to more employment in the cooperative sector. Processing of goods and enhancing the services to match international standards will also generate additional employment. Increased export of cooperative products would, in turn, also promote 'Make in India' thus leading to Atmanirbhar Bharat,' a government statement said.

 

Going organic

Second institution, Multi-State Cooperative Organic Society will manage various activities related to organic sector by providing certified and authentic organic products. It will also provide institutional support for aggregation, certification, testing, procurement, storage, processing, branding, labelling, packaging, logistic facilities, marketing of organic products and arranging financial assistance to the organic farmers through cooperatives and will take up all promotion and development related activities of organic products with the help of various schemes and agencies of the government.  It will empanel accredited organic testing labs and certification bodies who meet the criteria specified by the society to bring down the cost of testing and certification.

 

The third one, Multi-State Cooperative Seed Society will act as an apex organisation for production, procurement, processing, branding, labelling packaging, storage, marketing and distribution of quality seeds; strategic research and development; and to develop a system for preservation and promotion of indigenous natural seeds. It will promote seed replacement rate (SRR) and variety replacement rate (VRR) and help reducing the yield gaps thereby enhancing productivity.

 

'Quality seed production through this national level seed cooperative society will increase the agriculture production in the country leading to more employment in the agriculture and cooperative sector; reducing the dependence on imported seeds and provide boost to rural economy, promoting 'Make in India' and leading to Atmanirbhar Bharat,', the statement said.

Union Minister for Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal today highlighted Madhya Pradesh as an ideal investment destination and called upon investors from across the world to become partners in the progress and growth of MP. He was addressing Madhya Pradesh Global Investors Summit 2023 via VC today.

 

Shri Goyal said today’s summit offers an opportunity to the industry to participate in the vibrant future of India. Speaking about the numerous investment opportunities in Madhya Pradesh, Shri Goyal said it has emerged as the ideal investment destination. It has ample land, infrastructure, skilled resources and offers massive opportunities in agriculture, food processing, pharmaceuticals, automobiles, tourism, textiles, Renewable Energy. He highlighted that in international engagements the interest is also shown in investing in MP.

 

Speaking about MP, he said it is known as the heart of India reflecting the vibrancy and vitality of a New India. India's second largest state, it is very strategically located at the centre of the country, both north-south and east west-corridors cross in MP. He also highlighted that Renewable energy contributes 20 percent in its total power generation. The fact that it contributes to 24 percent of the world's organic cotton production reflects the growing importance of MP in the international market. He noted that the Gross State Domestic Product of MP grew by nearly 20 percent last year.

 

Lauding Madhya Pradesh for making rapid strides in good governance, Shri Goyal said this reflects the impact of the double engine government which is working to fulfil the PM’s vision of rapid transformation.

 

He expressed confidence that the Green hydrogen Mission launched by PM, combined with support of Madhya Pradesh government will help in bringing huge investments in several sectors particularly in green hydrogen and renewable energy. 

 

Shri Goyal said Prime Minister Shri Narendra Modi has on many occasions emphasised that the strength of India lies in its states and if India has to move forward it is very important for states to move forward. He further said Prime Minister Modi always focused on encouraging the development and economic growth in states thereby providing huge opportunities to the people in the remotest parts of India. He said PM Modi believes that states will be the strong pillars to support developed India, a commitment that the entire nation has taken along with PM on 15th august 2022 as the Nation celebrated Azadi Ka Amrit Mahotsav on 75 years of India's independence.

 

In his remarks, Shri Goyal pointed out that a focussed approach to infrastructure development, which in turn creates a strong foundation of economic development, has always been the cornerstone of a developed economy. He added that Madhya Pradesh has also been a part of this journey to promote infrastructure on a very big scale.

 

Referring to PM’s opening address at the Summit wherein he spoke about various initiatives of the Government- PM Gati Shakti, National Infrastructure Master Plan, Digital India, Shri Goyal said all these have been possible under the visionary leadership of PM Shri Narendra Modi. Citing examples of One Nation, One Tax, IBC, One Nation One Grid, he said the Government is developing infrastructure like never before.

 

Shri Goyal said India is today the 5th largest economy of the world and it is rapidly progressing to become the top 3 economies of the world.

 

Speaking about India’s G20 presidency, Shri Goyal said it is the right time for India to showcase to the world our growing strengths and increasing contribution to the world. India is once again becoming a Vishwa guru and leading the initiative of taking the world to become a safer place to live in. 

 

Stating that MP is emerging as an economic tiger, he hoped that MP will continue to grow at the speed of cheetah which were released in kuno national park by PM some months ago. He exuded confidence that MP will further accelerate the country's economy by attracting industries with newer opportunities.

 

Shri Goyal concluded by saying that India today clearly is the bright spot in the world and hoped that Madhya Pradesh will lead from the front and continue to participate in the nation’s efforts to make India a developed nation in the next 25 years.

Basmati rice exports from India have gained in value and volume following short-supplies from Pakistan, the only other competitor in the global market for the long-grained rice.

 

Data from the Agricultural and Processed Food Products Export Development Authority (APEDA) show that basmati shipments during April-November of the current fiscal have increased to 2.73 million tonnes (mt), a 13 per cent jump over 2.4 mt in 2021-22. 

 

The value of exports, on the other hand, has increased to $2.87 billion from $.2.06 billion. This is in view of the unit value rising 39 per cent during April-November to $1,051 a tonne from $860 for the entire 2021-22.

 

More room for a hike

In rupee terms, the rise in value is 48.6 per cent. Though data are available only till November, the picture has changed dramatically since then with Pakistan basmati exports dropping 44 per cent during the July-December period.

 

Since then, basmati rice prices have increased further. Currently, the fragrant rice from India is quoted at $1,450 a tonne, while the Pakistan variety is offered at $1,350. 

 

The buoyant exports have resulted in basmati farmers fetching 60 per cent higher price this fiscal. According to data from Agmarket, an arm of the Agriculture Ministry, the weighted average price of basmati paddy is Rs.4,326 a quintal against Rs.2,688 a year ago. 'There is room for India to increase basmati prices further in view of the shortage in Pakistan,' said S Chandrasekaran, who has authored the book 'Basmati Rice: The Natural History and Geographical Indication' and is a trade analyst.

 

Wettest August in 61 years

Pakistan has been badly hit by the wettest August in 61 years it witnessed last year. The neighbouring country’s agricultural production, mainly basmati and non-basmati paddy, has been badly affected by floods. 

 

Despite the damage, the US Department of Agriculture (USDA) has not projected any major setback to agricultural production. However, Rice Exporters Association of Pakistan has been quoted by the media that basmati production had declined 40 per cent in the Sindh province due to floods.

 

On the other hand, India’s basmati production is expected to be higher but details are awaited. Trade sources said Pakistan is going through a turbulent period due to a shortage of US dollars that is preventing it from importing commodities. The drop in basmati exports will further affect Islamabad’s balance of payment problem. 

 

Damage to rail link

Pakistan is currently witnessing skirmishes for food with social media flooded with such incidents. Last year, its wheat crop suffered due to a heatwave and currently, it is having to look at imports to overcome the shortage in the domestic market.

 

Chandrasekaran said during the August-December period, there would have been at least 50,000 tonnes shortfall in Pakistan basmati supplies in the global market each month. 'The historic floods have damaged the Karachi-Lahore rail link. It is another reason for Pakistan’s basmati exports to be affected,' he said. Differences between Pakistan and China over Main Line railway project under China Pakistan Economic Corridor have delayed the work to restore the link.

 

India, on the other hand, has gained with Iran buying 6.28 lakh tonnes (lt) of basmati rice during the first half of the current fiscal. This is two-thirds of its total basmati imports last fiscal. Saudi Arabia and United Arab Emirates are the next big buyers of Indian basmati, importing 4.45 lt and 1.8 lt respectively in the first half.