Basmati rice exporters to Iran fear slowdown, payment delays
India’s basmati rice exports reached 1.91 million tonnes between April and July 2024, with Iran accounting for 19% of shipments. However, rising tensions in the Middle East, particularly the Israel-Iran conflict, may disrupt trade and delay payments. Exporters fear significant losses, while recent government actions to ease export restrictions have led to a sharp drop in rice prices.
According to the commerce ministry, India’s basmati rice exports during 2024-25 (April-July) was 1.91 million tonne (MT), out of which shipment to Iran had a share of around 19%.
Just a few days after the government removed the minimum export price (MEP) of $ 950/tonne on the basmati rice, exporters have started fearing a slowdown in shipment to Iran, a major destination of aromatic rice if the Israel-Iran conflict escalates.
Rice industry sources said that risk in basmati rice shipment to Iran would increase following escalation in regional conflict and payment settlement for rice exports likely to be delayed.
However, the impact of basmati rice exports to Iran will depend on the future actions of Israel on Iran while the industry is closely observing the development in the Middle East.
Sources said the Government Trading Corporation (GTC) of Iran recently floated a tender to buy 0.1 MT of basmati rice from India, which is expected to be supplied by October 30. Exporters said that out of which around 50,000 tonne have already been shipped and the rest of the shipments have to leave ports from India by at least October 15.
‘Any disruptions in the rice trade between India and Iran could cause significant losses to both farmers and exporters,’ Ranjit Singh Jossan, Managing Director, Jossan Grain, a leading basmati rice exporter, told FE by adding that exporters are concerned about the evolving situation in the middle east region, a major destination of rice from India.
According to the commerce ministry, India’s basmati rice exports during 2024-25 (April-July) was 1.91 million tonne (MT), out of which shipment to Iran had a share of around 19%.
In FY24, out of the total exports of 5.24 MT of aromatic rice, shipment to Iran was 0.67 MT or 13% of total exports. However, in FY23, India exported one MT of aromatic rice to Iran out of the country’s total shipment of 4.55 MT.
Meanwhile according to a Bloomberg report, rice prices in Asia have fallen the most in over 16 years, as supply concerns diminish following India’s relaxation of some export restrictions. Thai white rice, an Asian benchmark, saw a dramatic drop of approximately 11%, settling at $ 509/tonne on Wednesday, according to the Thai Rice Exporters Association. This marks the largest decline recorded since May 2008 and extends a prolonged decrease in prices, reaching the lowest level in more than 15 months, the agency has stated.
The government last week had reduced the export duty on parboiled rice to 10% from earlier 20% imposed last year and removed ban on non-basmati white rice shipment and imposed a minimum export price of $ 490/tonne on it. India has been biggest rice exporters in the world in the last decade and it has market share of around 35% to 40% in rice trade.
Source Link : https://www.financialexpress.com/business/industry-basmati-rice-exporters-to-iran-fear-slowdown-payment-delays-3629861/
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