Indian Basmati Hopes Fade Over Fixed Import Price

EghtesadOnline: Basmati exports market of India was expecting a good time this year, as Iran had decided to resume rice imports from the country.

News ID: ۷۷۳۸۵۹

11 February 2017

But the higher price of Basmati rice made the situation hard, as Iran has fixed its import price at $850 per ton, Indian news portal Commodity Online reported.

Iran is one of the major importers of Indian Basmati rice, but at present the import price fixed by Iran is not viable for Indian suppliers due to higher freight costs. Indian exporters have to fix the price at least $900 per ton for the trade to be economical, which has made the hopes of Indian exporters fade.

Iran is one of the largest buyers of Basmati rice in the world. It is now estimated that India’s Basmati export earnings for the current financial year will be almost the same as last year, according to the director of Basmati Export Development Foundation.

According to Financial Tribune, Iran annually imports about 1 million tons of rice to supplement its domestic production of about 2 million tons and Iran imports about 0.7 million tons of Basmati rice from India.

India’s Basmati exports from April-December 2016 were 2.92 million tons, compared to 3.06 million tons in 2015-16 in the same period.

After touching a record export value of $4.88 billion in 2013-14, basmati export earnings were on a downtrend over the past three years in India on a decline in prices and lower purchases by Iran.

A 20-member Indian trade delegation visited Iran from January 28-30 to promote the export of rice.

According to Indian newspaper Business Standard, about 250 people participated in the sales promotion event held at Tehran’s Hotel Espinas. The deliberations helped dispel the negative image in Iran about possible health risks associated with the consumption of Indian rice.

The Iranian government has recently amended tariffs for importing rice by reducing it from the previous 40% to 26%. It was announced on January 21 that the rate would stand at 5%, following a series of tariff cuts on a list of agro-food products.

There is an all-out ban on rice imports during harvest seasons in Iran. This year the measure was in place from July 21 to November 21.