Basmati shipments are likely to see a slowdown in the near-term as Iran, the largest buyer of the Indian aromatic rice, has hiked the import duty to around 40 per cent from 22 per cent. Iran accounted for over a third of India’s basmati exports in value and about 40 per cent in quantity last year.

“There will definitely be an impact on our exports. We expect our shipments to come down by around 30-40 per cent to Iran this year,” said MP Jindal, President of All-India Rice Exporters Association. Iran has imposed a steep duty hike after a span of two years, Jindal, who is Chairman of Best Foods International, said.

The latest move by Iran is aimed at discouraging imports at this time of the year, when its domestic rice crop comes into the market. “We were expecting this duty hike. It may be a temporary measure and they may revert to the earlier levels by September-October,” an industry source said.

Growth in acreage Farmers in the key basmati-growing of Punjab, Haryana, Uttar Pradesh and Madhya Pradesh are seen planting more of the fragrant variety this year in anticipation of better returns as prices had shot up by 30 per cent last year. Also, with more farmers seen adopting the newer variety – 1509 –- which yields more and consumes less water besides being pest resistant compared with 1121, basmati acreage and output is poised for a significant increase this year. Basmati was planted on some 19 lakh hectares last year.

Vijay Setia, Director at Chaman Lal Setia Exports, said the delayed rains this year was seen driving acreages of 1509 variety in Punjab and Haryana. Planting of 1509 will go on till mid-August and it is too early to assess the acreage.

Other markets On the duty hike by Iran, Setia said the impact would not be significant as Indian exporters are not dependent solely on that market. “Every other market is growing for us. With the US resolving the tricyclazole pesticide residue recently, exports are likely to sustain momentum,” Setia said.

Besides Iran, Saudi Arabia and Iraq were the other large buyers of Indian basmati last year. Also, countries such as US, Afghanistan and African nations such as Ghana, Nigeria, and Ivory Coast have been buying more of Indian basmati to cater to their growing demand.

Jai Oberoi, Associate Director at LT Foods Ltd, said the Iranian duty hike will certainly affect the exports, without quantifying the impact.

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