Basmati exports to biggest buyer Iran come to a halt

Rice millers in India face a squeeze on margins as basmati trade to Iran has come to halt, as insurers aren’t ready to provide cover to shipments following the latest escalation in Iran-United States conflict.

Iran is the largest buyer of the premium rice from India, and the situation has arisen at the onset of the procurement period by the West Asian country.

In this volatile situation, payments for any shipments are also sure to be delayed for several months, All India Rice Exporters Association president Nathi Ram Gupta said.


Payments were late by five months last year and exporters are not ready to take more risk.

The rising hostilities in the US-Iran relations have dampened the scope of a revival in basmati trade.

Global shipments from India were down by 10 per cent in April-October 2019, but had increased marginally in November 2019. That was due to higher shipments to Saudi Arabia, Iran, Jordan, Kuwait and the US.

Indian rice exporters were expecting momentum in trade after government of Iran had opened a fresh tender in December for 200,000 tonnes of basmati from India.

“Basmati trade is hit hard as Iran buys more than one-third of the total export of the commodity from India,” Gupta said.

He said till the exports to Iran were not streamlined, India’s overall basmati rice exports would suffer.

Indian basmati rice is part of the staple cereal food in Iran. That country had imported 1.48 million tonnes of basmati rice from India in 2018-19, but in the current year exporters are circumspect over the delay in payments.

It had bought half a million tonnes of basmati till October 2019.

Some of the global basmati buyers other than Iran have increased their purchase this season, as they had anticipated volatility in prices in the coming months.