Iran has imposed various restrictions including putting an upper limit for import and fixing retail price of aromatic rice which is expected to hit Indian rice exporters in coming months. The new rule will not allow Indian exporters to sell their rice in Iran beyond $850 a ton which is far below the landed cost of $950 a ton of rice. The maximum consumer price is set at $ 1.15 a kg. Clearly, realisations of Indian exporters will diminish under the price caps. “Indirectly, this will benefit Pakistan because of its proximity to Iran. Transportation costs are higher for us,” said an official from the Agricultural and Processed Food Products Export Development Authority (Apeda). “This is unilateral imposition of a virtual import tariff. Iran government must realise that prices are decided by demand and supply and it is unfair to impose such restrictions,” said a leading rice exporter. “Pakistan may be nearer to Iran, but it doesn’t have rice to export. We are confident that Iranian companies will understand that India had a 20-30% lower crop than previous year and hence selling below $925 a tonne is not viable,” he further added. Indian exporters have sought the import price by Iran to be at least $900 per tonne for the trade to be economical.
A 20-member Indian trade delegation comprising exporters and commerce ministry officials visited Iran between January 28 and 30 with a view to promoting exports. The delegation visited various Iranian departments including Food and Drug Organization, Government Trading Corporation and Trade Promotion Organization, Iran Chamber of Commerce and Rice Importers Association. According to India’s Ministry of Commerce, “Film of about 3.5 minutes duration was screened depicting different aspects of Basmati cultivation, processing, and issue of health certificate with the assurance that Indian rice being GMO free.”
To supplement domestic production of about 2 million Metric Ton (MT), Iran imports about one million MT of rice every year out of which about 700000 MT is exported from India. Iran had been the largest importer of PUSA 1121 variety of basmati rice from India, however, in fiscal 2015-16, India’s exports to Iran almost halved. Indian government and traders were expecting a notification from Tehran that would have allow resumption of issuance of permits for import of rice. “The deliberations helped to dispel the negative publicity which appeared in some part of Iran media causing doubts about the health and safety of rice from India,” exporters told after three day visit to Tehran in January. Rice shipments to Iran had got a boost when India launched a rupee settlement mechanism from April 2012 with Iran to avoid sanctions from the US and EU. As part of the initiative, state-owned UCO Bank tied up with Iranian lenders like Persian, Pasargad, Saman and EN Banks for settlements of dues. Iran and India also had agreed to have referral labs in India for testing rice consignments rejected by Tehran because of presence of pesticide residue.