This document provides information about Basmati rice production and exports from India. It notes that India is the world's second largest rice producer and third largest exporter, and the largest exporter of Basmati rice. Basmati rice commands high prices internationally due to its unique aromatic qualities that can only be grown in certain regions of India and Pakistan. Exporting Basmati rice is highly profitable for India and its major importers include Saudi Arabia, UAE, Iran, Kuwait, UK and USA. The document also discusses value additions that have been made to Basmati rice to increase its market share and profitability.

1. CASE STUDY ON
BASMATI RICE
Submitted By,
ANKIT VERMA

2. As we know agriculture is one of the strongholds of Indian
economy providing direct employment to 50%-60% people
working in country. It forms the basis of many premier
industries of India Including textile , jute and sugar, rice
industries .Agriculture sector contributes 17.5% to
country’s GDP & 30% exports are of agri-products . In the
last 5 yrs this sector showed a growth of 30% & it will
Sustain the growth in future as well. Today India is the
leading producers & exporter of various agri-products , rice
Being one of them. India is 2nd largest producer of rice after
CHINA & 3rdLargest exporter of rice & largest exporter of
Basmati rice followed by Pakistan as per FAO.

3. 63%
20%
18%
GDP Composition by Sector
Services
Industry
Agriculture
Based on Rabobank report

4.  2/3 rd of world population consumes rice.
 Global rice production has fluctuated between
450 -500 million tons.
 Global consumption of rice is around 510-520
tons has been above production in recent years.
 Asia is the biggest rice producer , accounting
for 90% world’s production & consumption
 China is the largest producer of rice, followed
by India, Indonesia , Bangladesh , Vietnam etc.

5. 28.80%
21.60%
8.60%
6.90%
5.70%
4.60%
4.00%
2.40%
1.80%
1.70%1.40% 1.30%
Major rice producers of the world
China
India
Indionesia
Bangladesh
Vietnam
Thailand
Myanamar
Philippines
Brazil
Japan
USA
Pakistan

6.  Thailand is the largest exporter of rice ,Vietnam
being the second largest and India is the third
largest exporter.
 Basmati rice accounts for 10-12% of global
exports of rice.
 Philippines is the largest importer of rice , other
rice importing countries are Europe , Japan
middle east countries etc..

7. 34.50%
16.50%
14.10%
10.60%
6.30%
3.10%
2.90%
2.30%
2.10%
1.20%
1.10% 0.90% 0.60% 0.50%
Major Rice Exporting Countries of the world
Thailand
Vietnam
India
Pakistan
USA
China
Egypt
Italy
Uruguay
Spain
Argentina
UAE
Belgium
Myanmar

8.  India’s annual rice production for 2008-2009
was 99.15 million tonnes and it is expected to
cross 110 million tonnes for 2010.
 There are more than 4000 varieties of rice
grown in different parts of the country & is
grown in both seasons Kharif (80-85%) & Rabi.
 India is the third largest exporter of rice and it
exports both non-basmati and basmati rice.
 India is exporting basmati rice since 1985 on a
regular basis but exports of non basmati rice is
subjected to some restrictions.

9.  Basmati rice means “queen of fragrance “ or the perfumed
one . It is also known pearls of rice
 Indian Basmati rice is a long grained aromatic rice with
unique , pleasing & appetizing aroma .
 It is the aroma that gives its novel characteristics unmatched
by any other rice grain anywhere else in the world. Thus it is
considered world’s best quality rice .
 It is grown in small part of indo gangetic plains at foothills
of Himalayas in the north of country . The area in which it is
grown is geographically well defined & includes Haryana ,
western U.P , H.P J&K , Punjab . The climate & soil in this
region combines to give Indian Basmati its unique qualities
& characteristics . Its unique qualities & characteristics
cannot be replicated if grown elsewhere in the world. Thus
basmati rice is produced only in India & a small part of
Pakistan. Thus it is considered nature’s gift to India .

10.  Due to its characteristics & quality basmati rice
commands highest price among all the varieties in the
world & also fetches higher prices in international
market .
 Its export is an important source of foreign exchange of
country.
 80% of basmati rice produced in India is exported to
various countries of the world .
 85% of world’s basmati rice is exported from India &
remaining 15% is exported from Pakistan .
 There are many varieties of basmati rice grown in India
.Under section -5 seed act 1966, India has notified 11
varieties of basmati rice . They are basmati 370 , basmati
386 , type-3 , taraori basmati hbc-19 , basmati 217 ,ranbir
basmati , pusa basmati-l , Punjab basmati-1 , Haryana
basmati -1 , kasturi basmati , mahi sugandha . All these
varieties are exported from India . Thus India is a hub of
basmati rice & its products .

11. 85%
15%
Major Producers of Basmati rice
INDIA PAKISTAN

12.  While processing basmati rice various bi- products
like husk , bran , broken rice are produced as well.
All these products are sold in the market for good
prices for instance bran of rice is used to produce rice
bran oil which is also been exported to various
countries as it is good for heart & is used for cooking
similarly broken rice is sold in domestic market &
husk is sold to power companies as they use it to
generate electricity. Thus there is no wastage of
resources & manufacturer exporter can earn huge
dividends .

13.  Since basmati rice is produced only in India &
Pakistan both the countries have monopoly on
this product as a result exporters dealing in
basmati rice earns huge profit .
 Basmati rice as already mentioned is a high
quality rice & it fetches high price in
international market.
 Due to limited supply & increasing demand of
this grain every year any exporter dealing in
this product doesn’t have to worry about its
prospects . Its safe & surely a profitable export
item .

14. Introduction
Organic Basmati
Rice , Rice
Bread
Growth
Super Basmati
Rice , Ready
To Eat
Rice.
Maturity Decline
Y-axis:- sales
X-axis:- time

15.  The product life cycle curve for Basmati rice
will never reach decline stage as food grains
can never be out of demand .
 The sales of the basmati rice and its value
added products increases very slowly in
introduction stage but it increases very rapidly
in growth stage as result of which in growth
stage the graph is linear in shape .
 The growth period of PLC curve shall be very
large and basmati rice may or may not reach
maturity stage.

16. EXW ( Karnal ) Cost Of 25.75 Metric Tonne basmati rice = Rs 1258750
Total Cost Of Packaging 25.75 metric tonnes Basmati Rice = Rs 100000
Total Cost Of Production for 25.75 (25750 kg ) metric tonnes Basmati rice = Rs 1158750
Cost of production for 1 kg Basmati rice = Rs 45
1metric tonne = 1000 kg
Calculation of FOB ( Mumbai ) price for one container having 25.75 metric tonne Basmati rice
The government of India has set a floor price for the export of basmati rice at $900/tonne . It is expected that government
will further lower the price too $800/tonne so that our exporters can compete with Pakistan .

17. FOB (MUMBAI) For 25.75 Metric Tonne Rice IN USD = USD 35444.44
1 USD = Rs 45
FOB(MUMBAI) For 25.75 metric tonne→1258750+251750+50000+4500+30000=Rs 1595000
Export Credit Insurance = 30000
Cost Of Documentation = Rs 4500
Transportation & Handling Charges = Rs 50000
Profit is 20% of Rs 1258750 = Rs 251750
Profit Policy Is 20 % EXW ( Karnal ) Cost

18. Although Indian Basmati rice is quite popular in
world market still in order to increase the market
share of this product in world’s rice market , to
capture emerging markets & to compete with our
rivals (Pakistani Basmati rice) following market
strategies are adopted :-
 Advertisements :- An innovative and creative
add created with international market in mind
can increase the sales . Many manufacturers
Exporters follow this strategy.

19.  Participating in International trade fairs ,
international food shows & international food
festivals like food show of New York , Berlin
food festival etc is another way marketing.
 Packaging of product is another way of
marketing the product. An attractive packing of
basmati rice is useful in attracting the customers .
 Internet is another and cheapest way of
marketing the product . Creating your own
website and displaying your product catalogue
on it with complete details and giving adds on
various sites is another way of creating market .

21.  Exporting Basmati rice is a highly profitable business as it is
evident from the fact that all those exporters who were
exporting basmati rice have attained the status of export
houses , trading house , star trading houses & super star
trading houses .
 Even the government of India has many schemes through
which it can extend a financial help upto 75 lakh rupees for
starting a food processing unit .
 The basmati rice & its value added products have a huge
market . The sale – ability of basmati rice is very high as it
various uses like medicinal use, consumed as food etc .
 Moreover today the living standard of people in India &
other countries is improving thus more & more people are
switching to basmati rice . That is why exports of basmati
rice in last three years have increased significantly inspite of
global meltdown .

22.  According to APEDA Indian Basmati rice has a
huge market & is growing every year . In 2008 -
2009 basmati rice was exported to more than 70
countries.
 The major importing countries for basmati rice
for 2008-2009 are :-
 Saudi Arabia
 UAE
 IRAN
 KUWAIT

23.  UK
 USA
Emerging Markets Of Basmati rice
 During the global recession the exports of basmati
rice to many developed countries got affected as
result exporters started exporting basmati rice to
developing nations. The government of India also
encouraged this policy as result of which a new
market for basmati rice has emerged. Few
emerging markets are Mauritius , Singapore ,
Belgium , African countries like Brazil , Ghana etc

24. MAJOR IMPORTERS OF INDIAN BASMATI
RICE
SAUDI ARABIA
UAE
IRAN
KUWAIT
UK
USA
YEMEN
OMAN
CANADA
NETHERLAND
QATAR
BASED ON DGCIS DATA

25. India has been exporting basmati rice since 1985.
Since then India has covered a long way. Many
Value additions has been made at various levels
in order to increase market share & make exports
of basmati rice more profitable business. These
Value additions has also been done in accordance
with changing demand trends and needs of various
consumers worldwide. Following are the few
value additions that has been done in Basmati rice.

26.  Ready to cook rice products like ready to eat
vegetable Pulao , Mutter Pulao , paneer tikka
biryani etc.
 Flavoured basmati rice products in which
seasonings are flavoured to match popular Indian
tastes such as ginger-garlic , lemon , masala ,
tomato . The seasonings will be packed separately
in pouches & sold along with plain basmati rice.
 Saffron basmati rice (kesar chaval) is another
product becoming popular these days and is
being exported in middle east countries .

27.  Rice Bread came out just few year ago. It is now being
developed into several type of bread & they are quite
attractive to consumers of Japan despite the fact that
they are expensive. In the world market the cost of rice
bread is still much greater than wheat bread however,
it has the potential to grow in many countries in future .
Nowadays gluten-free rice bread (100%rice) has been
developed. This type of bread are good for those who
are allergic to gluten.
 Organic Basmati rice largely exported to E.U countries .
This rice has high nutritious value & is grown without
any use of synthetic or artificial pesticides .Thus it is a
eco friendly product.
 Lastly Instant rice noodles & rice chips are two new
products which are still in developing stage & will be
soon launched in market .

28. Ready To Eat Basmati Rice

30. Flavoured Basmati Rice Products

31. Various Types Of Rice Bread

33. Some More Value Added Products of Basmati rice

34.  Attractive Packaging of basmati rice so as to
attract customers. Earlier rice was packed in
simple gunny or jute bags now it is been packed
in jars, polypropylene bags , high value paper
bags with vibrant colours like blue , red ,yellow
etc .
 Vacuum packaging of basmati rice is another
value addition which is being done these days. It
increases self life of product & also retains aroma
of the product.