INDIA BUSINESS WORLD - MAY 2006
THE MONTH THAT WAS...

INDIA ADOPTS SUPER RICE PAKISTAN HIT

 Islamabad had a monopoly on Super basmati. Now that New Delhi can officially export the same rice, Pakistan could end up losing up to 40% of the global market

WHEN it comes to basmati, the border is no boundary. India has formally adopted Pakistan's best-selling rice after Punjab farmers and scientists gave it an enthusiastic thumbs up. As a stroke, it is even going to retain the Pakistani name since it works like a brand among international consumers. But all this is bad news for Islamabad. Pakistan had a monopoly on ‘Super' basmati. Now that India can officially export the same rice, Pakistan could lose up to 40% of the world market.

The commerce ministry has notified Super as a basmati variety under the Exports Inspection Certification Act. Henceforth, rice exporters can label and market the variety as basmati. However, it is yet to be notified under the Seed Act by the agriculture ministry. As a result, it cannot still be sold in the local market as basmati. But master that will not prove a hindrance as local basmati brands are not required to transparently label their packs.

Super was officially introduced in India three years ago by the Punjab Agricultural University. But it was already flourishing in the fields and mixed with other basmati varieties. Though there was initially a debate on whether or not India should retain the Pakistani name, commercial interests prevailed as Super is a very well-known variety overseas.

So what makes Super so special? Even though it has one non-basmati parent, the variety is the closest in specifications to traditional basmati. India's own Pusa basmati too does not come as close. Since it is almost as good as traditional basmati with the advantages of higher yields and disease resistance, Pakistan was able to create a whole marketing strategy focused around this unique variety. At present, Pakistan exports seven lakh tonnes Super annually.

BUT with India's aggressive adoption of Super, this monopoly is now over. As India is already producing three lakh tonnes Super paddy annually, it is only a matter of time before Indian rice companies start grabbing Pakistan's customers in the EU and the Middle East.

The timing of the commerce ministry's decision is important because it is just before the basmati planting season. Now that farmers know it can be exported as a basmati, they can expect better prices from exporters.

“We can expect a substantial increase in kharif 2006 acreage because both farmers and exporters are excited about it. Super from India will carry a better weightage because India is seen as a high-quality supplier,'' said Brig Anil Adlakha of the All India Rice Exporters Association.