The sudden rise in basmati rice prices in the local market when arrivals from the newly-harvested crop started in October not surprising. Basmati acreage was much lower in the kharif season because of erratic monsoon rains in Punjab and Haryana, and poor returns from the commodity in the previous season and therefore, output was bound to fall. Basmati prices rallied as the actual supply shortfall was far worse than the estimated drop in production. Basmati production is seen 10-13% lower on year due to drop in acreage and yields. The supply shortfall is more severe, as the millers and exporters did not have any carryover stocks from last season.