Ban on Rice Imports Lifted

EghtesadOnline: Rice imports have been banned since early November and no kind of rice can go through customs clearance`.

News ID: ۷۵۲۱۸۸

16 January 2023

Iran has lifted restrictions it recently imposed on rice imports, according to the director general of the Commerce Bureau of the Agriculture Ministry.

“There is currently no ban on placing order [for rice imports],” Shahyad Aabnar was quoted as saying by Iran Chamber of Commerce on Wednesday, adding that order has been placed for the import of 100,000 tons of rice in the past 24 hours.

His comments came after the head of Rice Importers Association of Iran announced that rice imports have been banned since early November and no kind of rice can go through customs clearance.

“Responsible officials have cited ‘balancing out bilateral trade’ as the reason why they have banned rice imports from the countries we normally purchase the grain from,” Karim Akhavan-Akbari was quoted as saying by the news portal of Iran Chamber of Commerce, Industries, Mines and Agriculture.

It was earlier announced that only Indian rice imports were banned.

Akbari said the government decision would cause shortage in the domestic market, since local production cannot meet domestic demand for rice.

“So far this year, close to 1.27 million tons of rice have been imported. Our annual import demand stands at around 1.5 million tons. Therefore, we need to purchase nearly 250,000 tons of the grain by the end of the year [late March],” he said.

He noted that year-on-year inflation for top quality Iranian rice stands at 123.1%, adding that for high-quality foreign rice the rate stood at 45.9% in the month ending Dec. 21.

“The first six deciles of the country consume imported foreign rice, due to their more reasonable prices. The ban set on imports can result not only in a shortage of rice, but an increase in prices. In our country, rice is a staple food, coming in second after wheat in the list of the most consumed grains. Therefore, this measure can impact a large number of the population, particularly the ones with more modest means,” he said.

His remarks came after Salar Saket, the deputy head of Rice Importers Association of Iran, echoed similar concerns.

“Indian rice accounts for the highest proportion of imported rice due to its high quality and reasonable price. Iranians prefer Indian rice over other foreign types of rice and importers trade commodities for which there is demand in the market. The rice we purchase from India meets the needs of six underprivileged income deciles and also balances the price of Iranian rice. So, it is only obvious how this ban on imports can damage the market,” he said.

The ban also applied to import of tea from India.

“It will be lifted as soon as bilateral trade is balanced out or registers surplus,” secretary of Iran’s Rice Suppliers Commission, Masih Keshavarz, was quoted as saying earlier.

A total of 1.75 million tons of rice were imported into Iran during the last Iranian year (March 2021-22). The import volume set a ten-year record high, according to the secretary of Iran Rice Association.

“Last year’s imports was more than twice the volume the country needed to make for the domestic production deficiency,” Jamil Alizadeh Shayeq was quoted as saying by Mehr News Agency.

A total of 2.25 million tons of rice were produced in Iran during the last Iranian year (March 2021-22), according to the deputy head of Iran Rice Union, Ahmad Eshraqi.

Rice consumption in Iran currently stands at 3 million tons per year, about 70% of which are supplied through domestic production, according to Alireza Mohajer, a deputy agriculture minister.

India has long been a major exporter of rice to Iran. Other exporters include Pakistan, the UAE, Thailand, Turkey and Iraq.

The three northern provinces of Gilan, Mazandaran and Golestan produce are Iran’s rice production hubs.

Contract-Based Production

Contract-based cultivation of rice was launched in Iran in April 2022 for the first time.

More than 6,322 hectares of paddy fields have joined the scheme so far, the CEO of the Central Organization for Rural Cooperatives affiliated with the Ministry of Agriculture said back then.

“We estimate that a total of 15,805 tons of rice will be produced under the scheme which is being carried out in the northern provinces of Gilan, Mazandaran and Golestan. Up until now, we have distributed over 1,100 tons of seeds among farmers taking part in the plan,” Esmaeil Qaderifar was also quoted as saying by ILNA.

Agricultural Production Insurance Fund, he added, has made sure all of these contracts are insured.

“Seeds, fertilizers and pesticides are provided for farmers as part of the contract-based production scheme. The government plans to expand the scheme to all strategic agricultural products,” he said.

FAO Forecast

The Food and Agriculture Organization of the United Nations expects Iran’s rice production to reach 3 million tons in 2022, down from 3.1 million tons last year. Five-year average output has been put at 3.5cereal million tons.

In its biannual report on global food markets, FAO said Iran imported an average of 1.3 million tons of rice during the 2018-20 period.

The 2018-20 average production has been put at 2.5 million tons.

Consumption is forecast to slightly increase from 3.6 million tons in 2021 to 3.7 million tons in 2022.

Average utilization during crop years 2018-19 to 2020-21 stood at 3.6 million tons.

2022-23, 2021-22, and 2018-19 to 2020-21 average closing stocks have been put at 0.6, 0.5 and 0.7 million tons respectively.

The 2018-19 to 2020-21 average per capita has been put at 38.2 kilograms.

Limited availabilities of water for irrigation cloud rice production outlook for Iran, the report noted.

“International trade in rice is predicted to register its third successive annual increase in 2022 (January–December), with volumes exchanged across the world forecast to reach 53.1 million tons, up 3.0 percent from the 2021 all-time high. With the exception of the Asian Far East, most regions are anticipated to step up their imports over the course of the year, often aided by state efforts to contain inflationary pressure. Such steps have taken the form of import duty remissions in various African and Latin American countries, or of an acceleration of government-contracted imports, as has been most notably the case of Iraq and the Islamic Republic of Iran.”