Record shipment to Iran propels basmati exports

Vijay C Roy

Tribune News Service

Chandigarh, March 25

A record shipment to Iran in January has propelled basmati exports from the country. The exports not only registered a positive growth in value terms but also in volume, benefitting both — farmers and exporters of the northern region. Iran is the biggest buyer of Indian basmati and it opened its market for basmati import in November last year.  

According to Agricultural and Processed Foods Exports Development Authority (APEDA) data, the basmati exports to different countries from April 2018 to January 2019 was 33.65 lakh tonnes as compared to 32.80 lakh tonnes during the corresponding period previous fiscal. Till December last year, although there was positive growth value-wise, mainly because of better realisation, however, volume-wise exports witnessed a negative growth.

In value terms, during the period April 2018 to January 2019, exports grew by 17% in rupee terms to Rs 24,919 crore as against Rs 21,319 crore in the same period previous year. In dollar terms, the growth was to the tune of 9%. The growth in rupee terms was higher than dollar terms mainly because of weaker rupee.

Also, the average realisation per tonne has been about 6% higher at $1,070 per tonne during the period as against $1,010 per tonne in the previous year.

Basmati is one of the major cash crops of Punjab and Haryana farmers and it accounts for more than 70-75% of basmati exports from the country. Other major basmati-growing states include western UP, Uttarakhand, J&K, Himachal and Delhi which contribute 25-30% of the total exports.

Though the exporters are upbeat, they are, however, of the view that despite significant increase in exports because of Iran opening imports from India, the volume will be more or less the same as compared to last fiscal. According to the exporters, Iran's annual basmati import market is pegged at almost a metric tonne.  

"There is no doubt that there has been a significant increase in exports in January this year, however, the export volume would be around 40 lakh metric tonnes, which is at par with last financial year," said All India Rice Exporters Association president Vijay Setia.

Basmati exports for FY 2017-18 were at 40.52 lakh tonnes as compared to 39.85 lakh tonnes during the previous year. However, the exporters are of the view that the realisation in rupee terms will be higher by 12-17% in the current fiscal as compared to last fiscal.

While the shipments of basmati gained, the exports of non-basmati nosedived by 15%. From April 2018 to January 2019, 61.21 lakh tonnes of non-basmati were exported to different countries as compared to 72.41 lakh tonnes during the corresponding period previous year.

Exports were down by 18% in dollar value terms and 12% in rupee terms during the period over the corresponding period last year. 

According to the exporters, due to significant increase in minimum support price of paddy, the Indian rice has been un-competitive in global exports despite weak rupee.