Traders today heaved a sigh of relief with the Iranian Hygiene Ministry giving a clean chit to Indian basmati but Punjab and Haryana farmers, who have banked heavily on this variety by doubling the area under it, may suffer badly this season with the prices of the popular 1121 variety expected to come down steeply.

Earlier an Iranian government laboratory --- Standard Institute of Industrial Research--- had claimed that Indian rice contained arsenic, lead and cadmium and did not have nutrition value. The laboratory also claimed that the increase in time on cooking of this rice was not natural but due to contamination by chemicals. Iran had subsequently banned the import of Indian and Pakistan rice.

Sources said with the Iranian Hygiene Minister also making a statement clearing Indian rice exports as much as 20,000 out of the 40,000 tonnes of basmati rice lying in various ports had been loaded in ships.

Meanwhile, Rice Exporters Association former president Vijay Setia said the internationally renowned SGS laboratory, which had also been given rice samples for testing by the Agricultural and Processed Food Products Export Development Authority, was also likely to make its report public in a day or two. He said the Standard Institute of Iran was also slated to give its final report on the issue soon.

The controversy has, however, reduced the price of the popular 1121 rice variety and traders don’t expect this price to increase due to a bumper harvest of this variety expected in both Punjab and Haryana. The 1121 variety, which was purchased by traders last year at an average price of Rs 3,000 per quintal, is at present selling at Rs 2,200 per quintal. This is expected to go down to Rs 1,600 to Rs 1,800 per quintal once fresh stocks start arriving in the market.

According to State Agriculture Department Director B. S. Sandhu the area under basmati cultivation in Punjab has nearly doubled this year. He said while a partial monsoon failure was responsible for this as basmati is transplanted late, he said farmers were also enthused by the high prices this variety was fetching over the last two years. The area under basmati cultivation has increased to around 6 lakh hectares this year. In Haryana basmati is grown on around 3.5 lakh hectares.

According to agri experts the only way to save farmers in Punjab and Haryana from being forced to sell short is to establish a minimum purchase price for basmati, which is slated for export by private traders.