Agri Business

Basmati exporters fear volume hit

Vishwanath Kulkarni Bengaluru | Updated on August 01, 2018

India produces roughly 20 million tonnes (mt) of basmati rice annually, of which nearly 5mt are exported.

With a sharp drop in the value of the Iranian currency and talk of implementation of stringent food norms in Saudi Arabia, exporters of basmati rice fear that shipments, in volume terms, for the year-ahead may get affected.

However, the government feels that despite these hiccups, basmati exports are likely to be maintained at last year’s levels.

Basmati is the largest product in India’s farm produce export basket. Iran and Saudi are the top two buyers of Indian basmati rice accounting close to half of total shipments.

Currency woes

The Iranian Rial has witnessed a sharp fall of over 100 per cent against the dollar since March this year on return of US sanctions and worsening economic crisis. Also, the four-month seasonal ban on rice imports imposed by Iran every year to protect its domestic growers during the harvest season has come into effect from late July.

 

“The currency decline will definitely hurt the local demand in Iran and in turn will harm our exports. In fact, we feel that our exports could come down this year,” said Gurnam Arora, Joint Managing Director of Kohinoor Foods.

Also, the talk of tightening of norms in Dubai for pesticide residue has triggered concerns among exporters and could dampen Indian shipments, Arora said. “We have urged the government to take up the issue at the diplomatic level with Dubai,”he added.

However, AK Gupta, Director, Basmati Export Development Foundation under APEDA, sought to downplay the emerging developments in Iran and Saudi and said that they would not have any major impact on Indian exports.

“These developments are temporary ups and downs and will not threaten our exports,” Gupta said.

Basmati exports, which were trailing last year’s levels in April-May, have picked up in June in value terms but volumes are down when compared with corresponding last year.

In April-June, basmati shipments dropped marginally to 1.16 million tonnes from 1.25 million tonnes in the corresponding period last year. In rupee terms, exports were up by around 5 per cent at ₹8,585 crore and 1 per cent at $1.28 billion over the corresponding quarter last year.

Published on August 01, 2018

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