Basmati Rise Case India

The following research report relates to the basmati rice industry of India. India is thesecond largest producer of rice in the world. But the contribution of Basmati rice in theoverall rice production is very minute. India and Pakistan are the only two countries thathold the patent to produce Basmati rice in the world. Basmati rice is known for its aromaand nutlike flavour. When cooked, it swells only lengthwise, resulting in long slender grains that are dry, separate and fluffy.The production process of Basmati rice is the most critical part because if the rice getsbroken it will not command premium price in the export market. Therefore, utmost carehas to be taken while producing it so that the grain is long enough to command premiumprice. For this a company needs to have state of the art production facilities in place. Thematurity period also plays a key role because if the maturity period is long the riceproduced will be of a superior quality.The demand and supply of Basmati rice is constantly increasing over the last few years.With the introduction of PUSA 1121 to the Basmati rice family, favourabledemographics of India and demand for new markets such as China and Mexico it willincrease further in the coming years. On the other hand more realizations from producingBasmati rice to farmers, increasing awareness and increase in demand from the foreigncountries will result in increase in the supply as well.The top four players in the organized market are REI Agro, LT Foods, KRBL andKohinoor. REI Agro follows fully integrated model whereby it does all the operationsfrom procurement of paddy to ultimately selling it to the final consumer. On the other hand the rest three players besides producing rice also rely on a bit of trading. Theseplayers concentrate more on branding unlike REI Agro who is more of a volume player.Both the models have their pros and cons and it’s ultimately the decision of the player tofollow whichever model he likes.Basmati rice industry is still in a very nascent stage and so a lot of opportunities exist inthe