According to trade sources stringent quality standards set by Iran  in the recent months is one of the major reas0n  for Slow Down of Indian Basmati rice export to Iran However, an article p0sted in the Wall Street Journal (WSJ) shows a different picture.

The Executive Director of  All India Rice Exporter Association,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 targets.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 analyst also told  WSJ that a recent slow down in oil purchases by India could be one of the reasons for Iran slowing basmati rice purchase from India. India’s oil imports from Iran more than halved to about 200,000 barrels a day i April, 2014 from about 415,000 barrels a day in January 2014, according to the data from the International Energy Agency. Iran and Ind entered into oil for rice exchange agreement under which india will sell a range of goods, includitg rice, soy meal and pharmaceuticals to Iran in exchange for oil.
Iran is an important destination for India’s basmati rice and constitutes about 30% of India’s total basmati rice exports. India exported around 1.44 million tons to Iran in FY 201344 (April – March), which is around 36% of India’s total basmati rice exports of around 4 million tons during the period, according to dats from Agricultural and processed Food Products Export Development Authority (APEDA). India’s basmati rice exports to Iran have started declining since February 2014 after Iran revised the accepted level of arsenic content in basmati rice from 150 parts per million (ppm) to 120 ppm. Local trade sources say India exported about 130,000 tons a month of basmati until February 2014, but sales have since plunged to 50,000-60,000 tons a month since then.

 

India’s total rice exports, including non basmati exports, stand at around 10.5 million tons ifl FY 2013-14, up about 3% from around 10.2 million tons exported in FY 2012-13, according to data.

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