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India to start basmati rice exports to Middle East

Indian exports of aromatic basmati rice, which have been delayed by nearly two months, could start any time now with buyers from the Middle East set to enter the market, traders said on Wednesday.

"We expect that orders will start coming within a week," a leading exporter, who did not want to be identified, said.

Traders said two to three leading importers from Saudi Arabia are likely to place orders of between 30,000 and 40,000 tonnes this month.

"The orders could go up if more buyers come but at least 30,000 to 40,000 tonnes will be exported initially," Ashutosh Sharma of Rice India said.

Indian basmati exports have been delayed because the leading buyer, Saudi Arabia, was carrying over last year's stocks and the Muslim fasting month of Ramadan coincided with the buying time.

Saudi Arabia buys between 400,000 and 450,000 tonnes of Indian basmati against total exports of 520,000 tonnes. The rest is bought by Europe and the United States.

Dealers said prices of average quality basmati have increased to $640 FOB (free on board) a tonne from $525 in the past few days on expectations of export demand.

"We expect the prices to remain stable at this level," one trader said.

Threat from Pakistan

Pakistan, which is likely to have a good crop and is carrying large stock, could hurt India's exports.

"They are selling cheaper than us and they have good stock to offer," Sharma said.

Traders said Pakistani basmati rice was quoted between $450 and $550 a tonne.

Pakistan exported 560,000 tonnes of basmati rice in 1999-2000 (April-March) financial year mainly to Middle East exporters.

Analysts estimate the Indian basmati crop in 2000-2001 (October-September) is likely to be between 950,000 and 1.05 million tonnes, about 10 to 20 per cent lower than last year.

Traders said buyers in Saudi Arabia might not switch to Pakistani rice because they prefer Indian basmati, whose grains are longer and have a stronger aroma.

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