India Queen Basmati Rice
India Queen Basmati Rice

Iran the biggest rice buyer from India may lift its ban on basmati rice import by this July. Iran has imposed ban on Indian Basmati rice import in mid of November 2014 to protect its local farmers and to offload rice stock from previous crop.

AK Gupta, Advisor, Agricultural and Processed Foods Export Development Authority (Apeda) said that the they are getting news from various stakeholders that Iran may resumes the ban after Ramzan but they do not have any written approval from them so far.

Iran, a major buyer of Indian Basmati Rice had banned rice import which has affected Indian rice market. Of total rice production in India, 40% of the rice goes to Iran as export. India had exported a total of 11.65 million tonnes (MT) of rice in 2014-15, of which basmati accounted for about 3.78MT and Iran has imported about 9.35 lakh tonnes of basmati in 2014-15.

In fact, the shipments to Iran declined by 35 per cent in 2014-15 over previous year’s 14.40 MT, largely due to the curbs imposed by the largest buyer of the Indian basmati.

Gupta said demand from other markets – mainly in West Asia, Europe and the US grew by around 20 per cent, which has helped offset the impact of Iran ban on exports.

Also, the domestic consumption of basmati rice is on the rise.

Basmati shipments rose marginally to 3.78 MT in volumes during 2014-15 over previous year’s 37.57 MT. “We expect the shipments to increase by 10-15 per cent this year,” Apeda’s Gupta added.

Rice exporters are hopeful that Iran would open up the market for basmati to meet its consumption. The Iranian rice consumption is estimated at around 3 MT a year, of which their domestic production is pegged at around 2 MT.

“Iran has to purchase around one million tonnes of rice to meet their domestic demand and India has a major share in their imports,” said Rajen Sundaresan, Executive Director, All India Rice Exporters Association (AIREA).

Rice exporters expect the basmati acreage to increase at least by about 5 per cent in the upcoming kharif season over previous year’s 2.1 million hectares, Sundaresan said.

Farmers in the key basmati growing States of Punjab, Haryana, Uttar Pradesh and Madhya Pradesh are expected to plant more basmati in anticipation of better returns.

Besides, the Punjab Government’s move to encourage farmers to plant more basmati, which consumes less water when compared to the normal rice crop, is also expected to help boost the acreage

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Iran has proposed a free trade agreement with India to boost bilateral trade and investment.

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