India: Basmati paddy prices hold firm despite heavy arrivals

• Amritsar arrivals exceed 1.25 lakh bags; Tarn Taran receives around 80,000 bags
• Rice prices remain unchanged as heavy arrivals limit further gains

India’s basmati paddy prices remained firm across key mandis on Sept 22 despite heavy arrivals. Barnala recorded a top price of INR 4,275/qtl, while Ratia quoted INR 4,245, with prices varying by quality and arrival volumes. Amritsar received over 1.25 lakh bags and Tarn Taran around 80,000 bags, yet prices held relatively steady, reflecting continued demand for quality paddy.

Quality continues to drive price differences

The gap between common combine-harvested paddy and better-quality hand-harvested material remained visible. Safidon quoted around INR 4,099/qtl for combine paddy and INR 4,201 for hand-harvested paddy, while Narela reported INR 3,931 for combine and INR 4,001 for hand-harvested paddy. Among top mandis, Patran quoted INR 4,240, Faridkot INR 4,230, Batala INR 4,195, Samana INR 4,170 and Tarn Taran INR 4,155. These prices indicate that paddy continues to trade above INR 4,100 at several centres despite strong arrivals.

However, prices from major mandis with relatively lower arrivals should not be considered representative of the broader market. The difference between premium-quality and common paddy remains an important factor in price formation.

Rice prices remain unchanged

Rice prices across major Punjab-Haryana grades remained unchanged on Sept 22. 1121 Steam A+ was quoted at INR 9,850/qtl, 1121 Steam A at INR 9,750, 1718 Steam A+ at INR 9,350, 1718 Golden Sella A+ at INR 9,600, 1509 Steam A at INR 8,100 and 1401 Steam A+ at INR 9,400. The stability in rice prices has stopped the recent decline, but mills have not yet raised prices. This provides some support to paddy prices, although the absence of a fresh rise in rice prices limits the incentive for mills to become more aggressive buyers.

Lower crude oil offers some support

Brent crude prices declined to around $98–99/barrel, from around $108–110 previously, amid reports of renewed Iran-US discussions and the possibility of the Strait of Hormuz reopening. Lower crude prices could provide some relief to freight, diesel and milling costs and improve export sentiment. However, the impact on paddy prices remains limited as domestic arrivals continue to be the primary market driver.

Outlook

Paddy prices are likely to remain dependent on arrival volumes, mill buying and the direction of rice prices. If arrivals decline while quality demand remains firm, prices could find further support. However, continued heavy arrivals at major mandis could limit gains, particularly for common combine paddy.