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Rediff News  All News  » Business » Basmati prices shoot up

Basmati prices shoot up

April 18, 2007 17:28 IST

That aroma and taste of Basmati will cost you more now. Faced with an increase in crop rates and shortage of supply, the country's major Basmati rice producers have increased the prices of the commodity by an average 10 per cent.

In November 2006, companies like KRBL, Kohinoor Foods and LT Overseas among others had hiked the Basmati prices by an average 15-20 per cent owing to higher paddy prices.

KRBL, the country's largest Basmati rice producer, raised prices by 10-15 per cent across all basmati categories. As there is a shortage of paddy, there is scope for further increase, said an official of KRBL.

Price of traditional Basmati crop has risen up to Rs 2,350 a quintal from Rs 1,600 in November last year while Pusa paddy has jumped from Rs 1,200 to Rs 1,770 in the same period.

While farmers shifted from Basmati crop to sugarcane last year, this year higher sowing of paddy was expected as the farm income had improved in the previous year.

According to market analysts, no one expected the prices to rise to these levels. But, with severe shortage of crop, the companies were left with no option but to hike rates. Consumers are likely to shift to low-end brands due to the price hike.

The LT Overseas group has raised the prices by 10 per cent. The ex-factory price of the top-end Basmati rice is currently at Rs 50 a kg. This is for the first time in the last 6-7 years that prices have reached these levels.

Commodity Online