Fresh troubles in the offing for India’s basmati exports

India’s basmati exports to Iran have slumped as the Islamic nation has introduced a new set of standard for basmati rice imports. Iran is the largest importer of basmati rice from India and in the current fiscal the country is expected to import 10 lakh tonne of basmati.

Talking to ET, MP Jindal, president, All India Rice Exporters Association said: “Iran has revised their accepted level of arsenic in basmati rice from 150 ppm to 120 ppm (parts per million). Due to this change in the accepted level of arsenic, basmati exports to Iran has temporarily slumped. In addition, the documentation process has also become time consuming. These two issues have slowed down exports to Iran.” The rice trade will need time to reduce the arsenic content in basmati rice. In the meantime, exporters have become active to see that business with Iran does not suffer and so they have decided to take a delegation to Iran next month to sort out the issues with Iranian authorities. “We are hopeful that exports will resume from April. Iran is a major market for us,” said Jindal.

 

India is expected to export 40 lakh tonne of basmati rice in the current fiscal. Of this, 10 lakh tonne is expected to be imported by Iran and the rest 30 lakh tonne is expected to go to Europe and Saudi Arabia. “Next year, we are expecting to export around 43 lakh tonne of basmati rice,” said Jindal. Rising income levels in the Middle East have also helped boost demand for basmati rice, traders said.

The total rice exports from India is expected to be around 100 lakh tonne in the current fiscal. The international price of basmati is at $1,450 per tonne in the current fiscal compared to $1,100 per tonne in 2012-13. In rupees, prices are in the range of .`5,400 to 6,200 per quintal compared to Rs2,500 to 3,500 per quintal in 2012-13.

Earlier, Western sanctions forced India to trim oil purchases from Iran but the latter remained a loyal and large customer. As sanctions stalled dollar payments in 2012, Iran started settling part of its oil debt in rupees and Iran was making use of rupee transactions to buy goods from India.

The rupee trade gave India an edge over other rice suppliers such as Pakistan which do not have such huge debts with India. This enabled India to establish a near monopoly in exports. Jindal also pointed out that brown basmati rice is gaining ground in EU. “Better marketing and consumer awareness is driving brown basmati sales. However, it will be difficult for us to give the numbers now. But definitely the segment is growing,” the AIREA president added.

Source : economictimes.indiatimes.com

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