Export duty drives up basmati prices

The price of Indian Basmati rice have skyrocketed further in the wake of a new $200 (Dh800) per tonne hike in export duty.

The export duty hike which has been levied to hold prices and stem shortage in the India, in turn, means heftier prices in Dubai.

Importers and dealers at the Deira market said prices of the rice variety had shot up – even doubled. According to Ali Abdullah Karji, Managing Director of Karji General Trading, Indian Basmati prices have doubled in the past five months due to the double whammy of a ban on non-Basmati exports and heavy export duty.

“I feel the rice prices are justified, as Indian agriculturists have been impacted by the hike in oil prices directly and indirectly,” he said.

At another level, the hike in petrol and diesel prices has also made it costlier to transport rice from the Jebel Ali Port to the warehouses in Al Aweer, he said. The transportation cost has quadrupled from the earlier Dh180 per 20-feet-container-load.

Karji said prices of Basmati which hovered around $1,050 (Dh3860) per tonne before the Indian Government’s intervention now stands at $2,100 (Dh7720) a tonne.

Saket Jindal, Managing Director, Prateek General Trading, said prices of three to four varieties of Basmati rice, have shot up by Dh30 to Dh40 per 40 kg bag over the past one and a half months .

But there is hope that prices may come down.

According to rice importer Jagdish Jangla, a new rice crop in India in two months time may mitigate the shortage.

“We are not buying now. Prices of Basmati, particularly Tilda, are ruling at Dh12 per kg as against Dh7 per kg three months ago. It is not wise to buy now at higher prices and sustain losses if prices were to drop suddenly when the situation stabilises in India,” he reasoned.