Basmati export to Iran likely by next week

Basmati export to Iran likely by next week

Basmati rice prices are seen rising in the international market with Iran likely to begin import of the cereal soon. Rice exporters, who are already getting 20% higher price for basmati compared with last year, said Iran could start import as early as next week. The announcement by Iran is expected soon as the trade was opened by this time last year," said Vijay Setia, president of All-India Rice Exporters Association (AIREA). "The delay is due to the extended domestic rice season in Iran." India exports about 4 million tonnes of basmati rice every year to more than 100 countries, of which Saudi Arabia, Iran, the UAE, Kuwait, the US and the UK are the main buyers. 

The revival in price of basmati in the international market follows a lean cropping season in India. Farmers had shrunk the area under basmati due to a fall in the domestic price of the commodity. Usually, demand and price of basmati increase around this time of the year, when Iran starts imports of the commodity after the close of its domestic rice season. Last year, Iran had announced import of basmati in the second week of January. This time the announcement is coming at a time when international basmati prices are already strong. We are expecting a formal announcement by Iran on 22 January on permission for import of basmati," AIREA executive director Rajen Sudershan told ET, adding that in the international market, basmati is available for $900-1,150 a tonne-- 15-20% higher than a year ago. This year, basmati prices are firm mainly due to lower harvest in India and higher cost of raw paddy in states like Punjab and Haryana. Sethia said basmati output this season is lower by 10%. According to exporters, the spike in basmati price is also in part due to the increase in price of crude oil, which has strengthened the economies in the Gulf region. Ashok Sethi, former president of Punjab Rice Millers and Exporters Association, said international basmati prices are being indirectly buttressed by increase in crude oil prices. Basmati prices were subdued in the previous two years. A lower harvest may not affect the volumes in the export market, said AK Gupta, director of Basmati Export Development Foundation (BEDF), an arm of Agricultural & Processed Foods Export Development Authority (APEDA). "Basmati exports could witness slight rise this year due to steady global demand and higher carryover stock from the previous season.


By BOA Bureau