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Iran, Iraq troubles cast long shadow on basmati rice exports |
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KOLKATA: India's basmati shipments to two of its top importers have halved in the first few months of this fiscal year, a worrying development for growers and traders at a time when output of the aromatic grain is expected to be more than 20% higher this kharif season.
Exports of basmati rice to Iraq, which is fighting Islamist insurgency, have nearly halved in the first four months of the fiscal year that started in April. In neighbouring Iran, the top importer of the grain, stringent regulations, including higher import tax, have hurt purchase from India.
Exports in the first five months of the current fiscal (year) are slow and this will definitely impact overall exports," MP Jindal, president of the All India Rice Exporters Association (AIREA), told ET. "If in the second-half exports do not pick up, it will be difficult for us to achieve last year's export figure of 38.7 lakh tonne." Trade figures show that Iraq has imported 65,960 tonnes of basmati rice from April to July, compared with 1.24 lakh tonne a year earlier.
Figures for August aren't out yet, but exporters see no change in the trend. Exports to Iran have also halved to 3.3 lakh tonnes in the same period. Tehran had increased import duty on rice to 40% from 22% and buyers aren't keen to import basmati rice from India by paying such a high tax. The average price realisation of basmati in Iran is around $1,400 per tonne. The premium quality, however, fetches $1,700 a tonne.
"We are hoping that Iran will reduce the import duty from end-September or early-October," said Jindal. AIREA is taking a team to Iran to discuss about how exports to the country can be increased. The West Asian nation had imported 14 lakh tonne basmati rice last fiscal year.
In addition to the higher import duty, Iran has also introduced a new set of stan dards for imports. It has revised the accepted level of arsenic in basmati rice to 80 parts per billion from 120 ppb. This change may have led to a temporary slump in basmati exports to Iran.
Traders expects India's basmati output to be about 80 lakh tonnes this kharif, or summer, season, compared with 66 lakh tonnes in 2013.
The acreage under basmati has increased to 2.1 million hectares from 1.6 million hectares in 2013.
"If exports slump, then there will be ample supply of basmati rice in the domestic market. This may bring down prices in the domestic market as well. It does not spell good for basmati rice producers this year," said Bal Krishna Mittal, managing director of Gurdaspur Overseas Ltd that deals in basmati rice. At present, a kilogram of basmati rice is priced Rs 90-100 in the local retail market. Traders say that prices might drop by 10% if supplies are on the higher side.
Source : economictimes.indiatimes.com
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