New basmati definition to boost Indian exports

MUMBAI: India's proposal to expand the definition of basmati rice is likely to shore up India's position as the world's top basmati exporter and raise the number of varieties of aromatic rice exported, industry players said.Last week, junior federal farm minister Kanti Lal Bhuria said the new definition plans to do away with the condition that one of the parents should be a traditional basmati variety for the progeny to qualify as basmati. The proposal is with the commerce ministry for consideration. "There is a very strong possibility that India would be able to get an additional 10-15 per cent share in the international market after this move," said Gurnam Arora, joint managing director of basmati exporter, Kohinoor Foods Ltd .

The global market for basmati, a fragrant rice traditionally grown in the Himalayan foothills, is controlled by just two players, India and Pakistan. India has 67 per cent of the market. A re-definition could lead to more non-traditional varieties entering the basmati basket, giving consumers a wider choice of aromatic rice varieties and push demand, industry players said. "With more varieties available on the basmati front itself, the lower-end segment would probably move to these varieties," said Danish Beg, assistant financial controller at exporter REI Agro Ltd.

"A transition will happen from non-basmati to basmati." The non-traditional varieties will attract new buyers as they will be priced lower. The move is also likely to affect Pakistani exports, a large part of which are of the non-traditional variety, industry players said. "This gives India strength. We will be able to get into Pakistan's share," said Kohinoor's Arora.
Exporters expect such a move to provide higher revenue. For REI Agro, it could mean exports in 2007/08 forming a larger share of its sales, at 25 percent, from 18 percent last year, Beg said. Kohinoor, too, hopes to grow its branded basmati exports 20-22 per cent over last year's 1.1 billion rupees.