UAE helps India regain its basmati market in Iran

Deepak Kumar | The Dollar Business

After Iran ended curbs on imports of basmati rice, the shipments of the aromatic food grain from India to Iran via the UAE have gone up by a record margin. During August and September this year, India’s overall basmati rice shipments to the UAE jumped to 81,000 tonnes as compared to 18,000 tonnes during the same period of 2014. Iran, by far, remained the major importer of Indian basmati rice, accounting for about 80% of total exports via the UAE. Iran has long been dependent on basmati rice imports to meet its domestic demand. It consumes nearly 2.4 million tonnes of basmati rice each year, while its domestic production accounts for only 1.4 million tonnes. Iran had stopped importing the scented rice since October last year due to its self-sufficiency in production and high pesticide content in imported rice. However, it has given green signals to imports, and is likely to soon issue licenses for the same. “Overall domestic basmati rice production and exports are more or less same as last year. In fact, exports of basmati rice have picked up in recent months. There has been a little slowdown in basmati rice demand in Iran, but that shortfall has been compensated by an increase of demand in Saudi Arabia,” R Sundaresan, Executive Director of All India Rice Exporters Association (AIREA), told The Dollar Business. But despite a significant increase in exports volume to the UAE and Iran, overall realisation has been less as compared to last year. Industry experts have suggested several reasons for a decline in shipments value. Some of them include the weak global price, economic slowdown, poor quality and an import duty imposed by Iran. During April-August 2015 this year, average price of basmati rice fell to $929 per tonne as against $1,415 per tonne a year ago. “Reliasation is not as high as it should be. It is definitely lower than the last year. Global slowdown has affected our overall realisation. But we are quite optimistic that the value will pick up by December end,” Sundaresan said.  

November 12, 2015 | 5:20pm IST