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The recent uptrend in basmati prices on expectations that Iran would resume rice imports may help India sustain export earnings from the long-grain aromatic cereal for the current financial year at last year’s levels.
Basmati shipments in the current financial year, so far, have been sluggish due to the curbs on rice imports imposed by Iran, a large buyer.
“There is a pick-up in price and also volumes. We may be able to catch up with last year’s levels in value terms,” said AK Gupta, Director, Basmati Export Development Foundation (BEDF), under the Agricultural & Processed Foods Export Development Authority (Apeda).
Overall volumes were likely to be marginally lower than last year. “We may see a drop of about 1 lakh tonnes, 2-3 per cent lower than last year’s 40 lakh tonnes,” Gupta told BusinessLine. Basmati prices in the international market have risen by around $100 per tonne to $800 in the recent past. The price rise will help in reviving exports, he added.
Though Iran has announced its intent to open up its market for the overseas rice, it is not clear as to when the country will start issuing permits. Iran has a temporary ban on rice imports mainly from end-July to early January next year in order to protect domestic paddy growers. Recently, a trade delegation led by the Apeda Chairman visited Iran to promote Indian rice exports.
Rice exporters are also hopeful of a rebound. “We may be able to achieve more or less the same as last year,” said Rajen Sundaresan, Executive Director of the All India Rice Exporters Association.
After touching a record $4.88 billion or ₹29,299 crore in 2013-14, India’s basmati export earnings were on a downtrend over the past three years on a decline in prices and lower purchases by Iran, a large buyer. To supplement domestic production of about 2 million tonnes, Iran imports about 1 million tonnes of rice every year out of which about 7 lakh tonnes (lt) is exported from India.
Purchases by Iran have been on a steady decline in the past three years. From an all-time high of 14.40 lt in 2013-14, exports to Iran dropped to 9.36 lt in 2014-15 and came down further to 6.95 lt in 2015-16.
Shipments to the UAE have grown from 1.48 lt in 2013-14 to 2.79 lt in 2014-15, rising sharply to 6.12 lt in 2015-16. Exports to Iraq have also doubled to around 4.18 lt in 2015-16 from 2013-14.
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