Egypt throws a spatula in Indian Basmati rice exports

Subramani Ra Mancombu Updated on August 24, 2021

Says it will grow, market the fragrant rice from next year

In what could turn out to be a concern for India in the long-term, Egypt will start growing Basmati rice and market it next year.

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Alaa Khalil, Egypt Director of Field Crops Research Institute at Cairo’s Ministry of Agriculture, however, has not specified if the fragrant long rice will be marketed within Egypt or marketed abroad.

Egypt Today daily quoted Khalil telling the “Al-Masry Effendi” talk show on “Al Mehwar” television about this development.

Imports from Asian nations

The daily quoted a Field Crops Research Institute expert Hamdi Mawafi as saying that Egypt imported $100 million (₹7,430 crore) of Basmati rice annually from Asian countries, which means India and Pakistan.

According to S Chandrasekharan, who has written a history book on the long grain rice “Basmati Rice: The Natural History Geographical Indication”, Egypt by growing the fragrant grain could try to export to Europe and nearby Islamic nations.

According to the Agricultural and Processed Food Exports Development Authority (APEDA) data, Basmati rice exports to Egypt

have more than doubled since 2017-18 fiscal.

Exports in the last fiscal were 30,399 tonnes valued at ₹186.80 crore last fiscal. It is the highest in recent years. This fiscal, shipments to Cairo during the first two months were 8,573 tonnes valued at ₹52.65 crore.

Problem for India

However, the danger for India is when Egypt steps out to export the fragrant rice to neighbouring Islamic countries, which could encourage such shipments.

“Egypt may not be able to export to Europe since India has obtained a Geographical Indication (GI) tag for its Basmati rice there. But it could face problems if Cairo ships out the fragrant rice to nearby countries such as Syria, Jordan, Iran, Iraq, United Arab Emirates and Saudi Arabia,” Chandrasekaran said.

Getting the GI tag enables countries holding the right to prevent a third-party from using the tag if their product does not match up to the pertinent standards. India would be able to force the issue in Europe since it is looking for similar protection for its wines and spirits.

But such a protection may not be possible from Egypt’s neighbours and the Gulf nations since a country holding GI tag for a particular product cannot stop other countries producing the same product using the same techniques as per the set norms.

₹20,000 at stake

Chandrasekaran pointed to Egypt’s cotton and tea exports as examples of how it can compete in the global market. Egypt’s tea exports, however, plunged from over $27.8 million in 2010 to $6.6 million last year. Its cotton exports, too, dropped from over $600 million in 2011 to around $450 million in 2019.

A rough estimate of Indian Basmati rice export based on last fiscal’s earnings shows that over ₹20,000 crore market share could be at stake, mostly in the Gulf region.

“Globally, economics gets preference over quality. If Egypt provides Basmati rice at a competitive price, it can affect Indian shipments,” the historian said.

Taking into consideration Pakistan’s interest in the Basmati rice market, Egypt’s possible entry could totally challenge market share worth over $4 billion (₹30,000 crore).

“There will be one big hurdle for Egypt to surmount, though. Can the Basmati rice produced in the African nation match the taste of our rice? That will determine Indian Basmati’s fate,” Chandrasekharan said.

It is not that Egypt will walk away with all the shipments, but it could dent Indian exports to some extent in case it begins targeting neighbouring nations for its shipments.

This development from Egypt comes when India has sought an exclusive GI tag for its Basmati rice in Europe. This issue is under dispute with India and Pakistan given time to negotiate and settle it among themselves.

Published on August 23, 2021
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