As the Israel-Iran conflict stirs up tensions in the Gulf region, its effects are reaching Delhi’s Narela grain market, Asia’s largest grain hub. Farmers who were hoping for good returns on their paddy crops are instead facing a decline in prices, with rates down by 25-30% compared to last year.
Amid low demand from Gulf countries and a difficult domestic season, traders in the Narela market are concerned. This year, there has been a significant reduction in paddy reaching the market. On average, only 30,000-35,000 quintals are arriving daily, compared to 50,000-60,000 quintals last October-November.
Why Gulf Demand is Important for Paddy Rates
Many traders rely on Gulf countries for rice exports, which provide stable demand and better prices for farmers. However, the recent turmoil in the region has resulted in decreased purchasing, putting downward pressure on rates. For farmers like Jagtar Singh, who visited Narela to sell his paddy, the prices this season are disappointing. “I got much lower prices than last year,” he said. Farmers are typically drawn to Narela for cash payments and favorable rates, but with current market conditions, fewer farmers are coming.
Weather Impact and Reduced Paddy Production
This year’s unpredictable weather has also reduced crop production, with farmers reporting 30-40% lower yield. With less supply, one might expect higher prices, but the Gulf-related demand issue has counteracted this. The resulting price drop is directly affecting farmers’ earnings.
Mill Closures in Delhi
Delhi’s ongoing pollution challenges have led to the closure of rice mills in the area, forcing traders to turn to mills in Haryana and other neighboring states. This shift has influenced market dynamics, as most farmers now prefer to sell their paddy directly in Haryana, Uttar Pradesh, and other neighboring regions. Haryana markets like Sonipat, Panipat, and Kurukshetra have become primary alternatives for traders, where farmers are reportedly getting better prices.
Market Rates: Comparing This Season to Last Year
The table below compares paddy prices per quintal between last year and this season for various paddy types in Narela market:
| Paddy Quality | Average Price Last Year (₹/quintal) | Average Price This Year (₹/quintal) |
|---|---|---|
| 1509 | 3300-3600 | 2600-2900 |
| Sharbati | 2400-2500 | 2000-2100 |
| Crown | 2700-2800 | 2000-2200 |
| HR-10 | 2500-2600 | 2100-2200 |
This decline in prices is pushing farmers to reconsider selling in Delhi and explore other market options.
What’s Next for Farmers and Traders?
The mandi administration is hopeful that prices might stabilize with the recent government decision to eliminate the 10% export duty, which is expected to boost international demand for Indian rice. However, the Israel-Iran conflict remains a major factor that could continue to impact trade. For now, farmers and traders are facing an uncertain season in Delhi’s Narela market.
