Bengal’s Premium Aromatic Rice- ‘Gobindobhog’ Experiences 11% Decline

Due to expectations of a larger crop and higher quality produce, the price of West Bengal's premium aromatic rice variety, Gobindobhog, has decreased by almost 11%. Sources claim that the 20% customs duty has a negative impact on rice exports and lowers prices as a result.

The old crop, which typically commands a higher premium over the new crop due to greater demand, is currently trading for between Rs 42 and Rs 45 per kilogramme this year as opposed to Rs 50 per kilogramme at the same point last year. According to insiders in the industry, this year's Gobindobhog rice production will likely be 5% to 7% higher due to a higher paddy-to-rice conversion rate from a better-quality crop.

Due to expectations of a larger crop and higher quality produce, the price of West Bengal's premium aromatic rice variety, Gobindobhog, has decreased by almost 11%. Sources claim that the 20% customs duty has a negative impact on rice exports and lowers prices as a result.

Suraj Agarwal, CEO of Tirupati Agri Trade, claims that last year's prices were impacted by the crop's quality being compromised by untimely rains at the time of harvest. However, because of favourable weather conditions, it is anticipated that this time, both quantity and quality of production will be higher. By the third week of November, the new crop will begin to arrive at the market.

Around this time of year, the price of the old crop typically rises in the case of Gobindobhog. But this year, prices are being restrained because Agarwal believes that the new crop will be produced in greater quantity and with higher quality. Gobindobhog rice can typically be produced from 100 kg of paddy, or about 58 kg. However, this year, the industry anticipates a much higher conversion rate, with 100 kg of paddy producing close to 62 kg of rice.

Over the past few years, the price of the premium variety aromatic rice has steadily increased, supported by strong demand from both domestic and foreign markets, particularly Dubai and the Middle East. Because farmers are getting better returns on their cultivation of this particular variety than they would on common paddy, production has also been steadily increasing (Swarna).

In West Bengal, production of the specialised crop known as Gobindobhog paddy has steadily increased. While it used to be primarily grown in the East Burdwan district, it is now also grown in some areas of Midnapore.

Bengali farmers have started cultivating Gobindobhog due to the possibility of earning more money. In 2022–2023, the area under cultivation increased from roughly 35,000 hectares to roughly 44,000 hectares. In international markets, particularly in Europe and the Gulf states, gobindobhog is in high demand. However, sources claimed that the 20% customs duty placed on rice has hurt exports and consequently affected prices.

In any case, West Bengal Chief Minister Mamata Banerjee recently asked Prime Minister Narendra Modi to give the orders necessary to extend a customs duty exemption on exporting Gobindobhog rice as soon as possible.

Banerjee claimed that the state government has encouraged rice export in addition to expanding production in regions that are suitable for this premium variety in order to sustain demand for this rice variety abroad. According to her letter, the imposition of customs duty would consequently have an effect on the demand for and domestic price of the paddy and, consequently, on farmers' income.