Rice export prices drop to the lowest in five years

Export prices of Indian rice fell to the lowest in nearly five years this season with subdued demand from Iran and European Union countries, even as the new crop is being harvested in northern India.

Iran is one of the largest importers of Indian basmati rice in recent years, and the likelihood of lower sales has led to a price drop, said exporters. Iran used to buy a quarter of India’s annual basmati exports of 4-4.5 million tonnes, while Europe had accoutned for 8 per cent.

According to exporters, the average price of parboiled basmati 1121 premium variety currently being quoted was $860 per tonne compared with $1,200 six months ago. The average export price was in the range of $950-1,000 per tonne in the past five years, said Satish Goel of Shree Jagdamba Agrico Exports, which exports basmati to Iran.

“The current prices are a five-year low and can further fall. In the past six months no new contracts with Iran have been signed and with India not importing oil we don’t see demand of Indian basmati rice. This is weighing down prices,” said Goel.

Exporters said India’s basmati rice exporters were likely to lose out to Pakistan in the Iran market. Usually, the contracts for exports are signed by September-end and the beginning of October, but this year these have not been signed till date, said Goel.

Apart from the drop in demand from Iran, the basmati rice industry is also under stress because of stringent rules of pesticides residues applied by the European Union.