Basmati rice prices surge before Iran ban
Iran is a major importer of Indian basmati rice. West Asian countries accounted for 75% of India’s basmati rice exports in 2014-15.
"Basmati prices have been increasing. In the last one month, we saw a jump of 20%, largely in 1121 variety, which is trading at Rs 46 a kg at wholesale rates,” said Mohinder Pal Jindal, president of All India Rice Exporters Association. Iran is a major importer of Indian basmati rice. West Asian countries accounted for 75% of India’s basmati rice exports in 2014-15.
Jindal said traders have been signing contracts and sending rice shipments ahead of a ban on Indian basmati starting July 23 as Iran seeks to protect its local industry. Vijay Sethia, past president of New Delhi-based AIREA, said Iran had imported 40 lakh tonnes of basmati rice in FY16 compared with 37 lakh tonnes in the previous year.
“The prospects for basmati rice have improved after almost two years,” Sethia said.
Rice is the staple diet for almost half the global population. Over 90% of the global rice output and consumption is centred in Asia, with China and India both the world’s largest producers and biggest consumers. India accounts for over 70% of the world’s basmati rice output, which is a small portion of the total rice produced in India. Rice production in India is expected at 103.36 million tonnes in 2015-16.
Prices are on an upward trend compared with last year, said Gaurav Jain, director of DCP India, which sells basmati under the Asbah brand. “Countries like the Netherlands, Italy, Spain, Cyprus and Maldives are also showing keen interest in Indian basmati rice, which is superior and price competitive compared to Pakistan’s rice. That is why India’s basmati rice enjoys around 65% market share internationally,” Jain said.
Prices of the non-aromatic variety from West Bengal, the largest riceproducing state in India, have fallen as exports to Bangladesh dried after the country doubled import duty on rice to 20%.