Israel-Iran dispute likely to affect Basmati rice exports
12-Oct-2024 01:05 PM
New Delhi. The tension and dispute between Israel and Iran is expected to affect the export of Basmati rice from India. While this has increased the concern and anxiety of exporters, the producers of Basmati rice are also suffering huge losses as its wholesale market price has fallen much below last year.
India is the leading producer and exporter of Basmati rice. Its share in the global export market is 80 percent and Pakistan's share is 20 percent. About 40 percent of Basmati rice from India is exported from Punjab.
Iran has been the leading buyer of Indian Basmati rice. At one time, 25 percent of Basmati rice from India was exported to Iran alone.
But the situation has become somewhat uncertain due to the two-three month ban on rice imports to protect the interests of domestic farmers there.
Despite the lifting of the ban, there is doubt in importing rice there. Insurance companies have stopped giving insurance for exports to Iran, due to which the prices of Basmati paddy in the domestic sector have fallen sharply by Rs 700-800 per quintal as exporters and rice millers are not showing much interest in buying it in various wholesale markets. This is naturally increasing the concern of the farmers.
Basmati production is expected to increase by 15 percent during the current Kharif marketing season as compared to last year, which will increase its arrival in the markets. Lack of buyers may increase the crisis for farmers.
It seems that the farmers and exporters of Punjab may have to face a double whammy of crisis this time. During the financial year 2023-24, the export of Basmati rice from India increased rapidly to a peak level of 52.42 lakh tonnes,
which generated a magnificent income of Rs 48,389 crore or $ 5.837 billion. During the current financial year, a huge fall in the price of Basmati rice is being seen while the government has also withdrawn the minimum export price (MAP) of $ 950 per tonne fixed for Basmati rice.
Last year, the price of Pusa 1509 Basmati rice was Rs 3500 per quintal, which has come down to Rs 2700 per quintal this time. Due to this, the producers are incurring losses. Apart from Iran, export of Basmati rice continues in other countries.
Saudi Arabia largely imports about 10 lakh tonnes of Basmati rice from India, but one of its important ports - Jeddah is located near the border of Yemen and the ships there remain under threat from Houthi rebels.