Prices Of Basmati Almost Doubled Since 2006

According to a recent report titled Rice Market Situation conducted by London-based Rice Association, prices of traditional basmati varieties have soared in the global market by almost 100 to 120 % since 2006.

The ban on genetically modified rice in the European Union market in 2006-2007 has also helped increase the demand for basmati rice not only in Europe but also in the Middle East and the United States.

Declining stocks as global demand for rice has exceeded supplies in last few years; growing population, especially in rice consuming countries; increasing wealth in India and the Middle East have all boosted demand for basmati rice.

The acreage of basmati sown in India is gradually declining in part due to competition from other crops that are more profitable for farmers. Traditional Basmati is a difficult crop to grow requiring more labor and other inputs than alternative crops farmers can grow. In recent years, there has been strong competition from sugar cane production, which has a duel use as bio fuel.