According to industry observers in India, basmati rice exports are likely to fall by 10 to 15 % in the year to March 2007 as prices of the aromatic grain have shot up.

The price of paddy has risen 40 percent from a year ago to 18.50 rupees *a kg and is likely to pinch overseas buyers, they said.

India exported 1.1 million MT of basmati rice in the year to March 2006, a senior industry official said.

India and Pakistan grow and export aromatic rice and the main buyers are the Middle East and Europe.