Iran, the principal driver of India’s rice exports constitutes about 30% of India’s total basmati rice exports. India exported around 1.44 million tons to Iran in FY 2013-14 (April – March), which is around 36% of India’s total basmati rice exports of around 4 million tons during the period, according to data from Agricultural and Processed Food Products Export Development Authority (APEDA). APEDA also discloses that India’s total rice exports, including non-basmati exports, stand at around 10.5 million tons in FY 2013-14, up about 3% from around 10.2 million tons exported in FY 2012-13.
However an article posted in the Wall Street Journal (WSJ) today shows a different picture. The Executive Director of All India Rice Exporters Association (AIREA) told WSJ that Iranian buyers may be planning to settle deals at lower prices, which means that they are using quality norms as a reason to reach their price target. He noted that Indian basmati traders are keen to secure the Iranian market and these issues would be sorted out in a meeting with the Iranian authorities soon.
Some analysts also told WSJ that a recent slowdown in oil purchases by India could be one of the reasons for Iran slowing basmati rice purchases from India. India’s oil imports from Iran more than halved to about 200,000 barrels a day in April, 2014 from about 415,000 barrels a day in January 2014, according to the data from the International Energy Agency. Iran and India entered into an oil for rice exchange agreement under which India will sell a range of goods, including rice, soy meal and pharmaceuticals to Iran in exchange for oil.