basmati rice 1As per recent information available it has been indicated that Indian rice exporters are expecting Iran to issue fresh basmati rice import permits from next month as it was disclosed by the Executive Director of the All India Rice Exporters Association (AIREA). There are indications from importers in Iran that they may issue fresh licenses from December or January. It has been revealed that Iran imposed a temporary ban on rice imports in November 2014 citing self-sufficiency in rice production and excess stocks as reasons. However, the government of India has been pursuing the Iranian authorities to resume basmati rice imports from India.

Further, it has been narrated that Iran is the biggest buyer of India’s basmati rice but following Iran’s ban, India’s basmati rice exports was affected  significantly. Data indicates that India’s basmati rice exports to Iran fell to around 930,000 tons in FY 2014-15 (April – March) as compared to around 1.44 million tons on FY 2013-14. In value terms, India’s basmati rice exports to Iran fell to around Rs.9,759 crores (around $1.5 billion) in FY 2014-15 from around 10,976 crores (around $1.68 billion) in FY 2013-14.

Indian Queen Basmati Rice Ad.
Indian Queen Basmati Rice

Furthermore, as per data available from the AIREA, it indicates that India exported about 33,554 tons basmati rice worth Rs.192 crores ($29 million) in August 2015, against 44,022 tons worth Rs.335 crores (around $51 million) in August 2014. Meanwhile, it has been observed under local condition, that the basmati rice farmers are feeling the impact of reduced demand. In addition, domestic paddy prices have also fallen to around Rs.1, 300 to Rs.1, 800 per quintal (around $229 – $274 per ton) from around Rs.3, 000 per quintal (around $458 per ton). Thus, the exporters and traders are reluctant to pay high prices for procuring basmati paddy due to low demand. Further, in this context, there is indication; it is likely to stage protests against the state governments of Punjab and Haryana for encouraging them to increase the production of less-water consuming and high-yielding basmati rice varieties this year.