Lower crop and high prices have hit basmati rice exports but some buying is likely in the near term as traders expect prices to soften.

Dealers said the country's exports of aromatic Basmati rice in 2002-03 (July-June) are likely to come down by around 100,000 from last year's sales of 500,000 to 600,000 tonnes.

"The current level is unsustainable, we expect prices to come down," a senior trader at ITC Ltd told Reuters.

Dealers said top quality Basmati rice was quoted around $950 a tonne compared with $750 a tonne a year ago, forcing buyers to stay away from the market.

"Our major buyers like Saudi Arabia are more or less covered for the season. They will step in the market only if they get lower prices," a leading Mumbai-based exporter said.

India, which sells long-grain Basmati rice mainly to the Middle East and Europe, reaped a lower crop of around one million tonnes compared with 1.4 million tonnes a year ago, they said.

Rice sowing takes place in June-July and harvesting is in October.

Traders said lack of monsoon rains last year hit the Basmati crop in northwestern Rajasthan and northern Uttar Pradesh states. "The crop is normal in Punjab and Haryana because of irrigation facilities," said Amit Arora of rice trading firm Satnam Overseas Ltd.

But dealers said there was no problem with the quality of Basmati rice. "It is only the output which has been affected," an official of Punjab State Cooperative Marketing Federation said.

India's four-month monsoon rains hit the southern coast of Kerala on schedule in June but the crucial month of July was dry in major growing regions, leading to a lower crop output.

Traders said arrivals of Basmati paddy were nearly over in marketing yards but many millers were still holding stocks.

"There are not many buyers at the current price level and millers who bought at high prices are not ready to sell at cheaper rates," a New Delhi-based trader said.