Rice Imports Resume in Iran as Seasonal Ban Ends

EghtesadOnline: Rice imports have resumed in Iran following a letter sent by Deputy Agriculture Minister Ali Akbar Mehrfard to the caretaker of Trade Promotion Organization of Iran Mohammad Reza Modoudi.

News ID: ۷۸۴۳۷۳

04 December 2018

Mehrfard notified TPO that the seasonal ban on imports of the crop, a staple food in Iran, has come to an end, ILNA reported.

Every year and during the rice harvest season, the government bans rice imports in support of local farmers and domestic production.

Iranians consume 3.2 million tons of the staple food annually, less than 2 million tons of which are cultivated by local farmers, according to Financial Tribune.

India is the biggest exporter of the grain to Iran, followed by Pakistan, Thailand and Uruguay.

Indian rice exporters have already geared up to begin exporting basmati rice to Iran. India's payment system with Iran is being relaxed further for basmati rice exports after the US allowed India to continue importing crude oil from Iran and develop Chabahar Port.

Now, India is finalizing guidelines for exporting basmati rice to its largest importer Iran on a rupee payment basis, Business Standard reported last month.

Last year, India exported $4.17 billion worth of basmati rice and Iran was the largest buyer of rice with $905 million. In the first five months of 2018-19, exports have already crossed $2 billion and Iran continues to be the largest buyer for India followed by Saudi Arabia.

When the US announced sanctions against Iran, Indian farmers had already increased area under basmati but exporters were cautious. However, the recent exemption for Iran followed by the easing of payment crisis has lifted the sentiments of basmati exporters.

According to Indian firm Kohinoor Foods' joint managing director, Gurnam Arora, the "Iran issue" had also been resolved to a large extent and traders have been allowed to barter deals and consignments valued in rupee terms.

All-India Rice Exporters Association Executive Director Vinod Kaul said, "The new basmati crop has started coming to the market and we are confident that Iran would account for about 1 million tons of exports this season.”

In Iran, rice cultivation is only permitted in the two northern provinces of Gilan and Mazandaran, and will be gradually banned in other Iranian provinces over a period of three years, as per a directive newly approved by the government and communicated to the related bodies after it was earlier approved by the Committee for Adaptability to Water Shortage.

“The Agriculture Ministry will introduce alternatives to be cultivated in other provinces instead of rice, abiding by which will be obligatory,” Deputy Agriculture Minister Ali Morad Akbari has been quoted as saying by Mehr News Agency.

The move is aimed at saving on dwindling water resources, as the country is facing an acute shortage of water.

Akbari noted that there are around 630,000 hectares of paddy fields in Iran, 170,000 hectares of which are located in Gilan and Mazandaran.