Iran, Saudi Arabia, Iraq, United Arab Emirates, Yemen Republic, USA and Kuwait are top seven countries importing basmati rice from India. India’s basmati rice exports is showing a declining trend but not by too much. Situation is not that grim and Indian basmati rice exporters need not lose heart. In today’s world of online commodities trading they can sell basmati rice online to buyers waiting to import basmati rice from India through tradologie.com B2B procurement platform. This platform has tens of thousands of buyers and sellers registered on it. Any buyer or seller interested in trade of basmati rice in bulk can register on this platform using easy steps.
Overall basmati rice export from India in 2021-22 falls by 11.5% but to UAE rises by 11.98%
Compared to last fiscal basmati rice exports from India fell by about Rs. 3434.23 crores, that is 11.5% decline in 2021-22 fiscal. Overall quantity of basmati rice exported fell by 14.76% during the same period. Surprisingly contrary to this declining trend basmati rice exports to UAE went up 11.98% (27448) metric tons.
Iran biggest importer of Indian basmati in 2021-22 fiscal
Iran became largest importer of Indian basmati rice this fiscal recording surge of phenomenal 33.53% in quantity and 39.35% in value and easily overtook Saudi Arabia, largest exporter of Indian basmati rice last fiscal.
Indian Basmati rice import by Saudi Arabia follows the declining trend
Considerable fall of 3.6 LMT and Rs. 2234.46 crore in quantity and value respectively was noted this fiscal compared to 2020-21 fiscal, as far as Indian basmati rice exports to Saudi Arabia is concerned. Similarly, basmati rice from India to Iraq fell down by about 24.71% in quantity and 19.49% in value.
Relief for top importers of Indian basmati
Importers of Indian basmati rice got worried after India curbed and restricted export of wheat and sugar respectively. They feared that a ban on Indian basmati was also impending but their fears proved unfounded. Clarification has come that wheat export ban is a one of case ad there is no plan to ban basmati and non-basmati rice export. India has enough stocks of rice lying with FCI and private traders too. Domestic prices of rice are also not going out of control.
New horizons for Indian basmati rice exports
Latin America is brand new export destination for Indian basmati rice exporters. Suddenly barrage of import enquiries landed in India from Latin America countries. Indian basmati rice exporters have been exploring new horizons as they lost traditional market of Iran. Latin American countries used to import from US in the past but have started exploring Indian basmati rice market now. India needs to look beyond traditional basmati rice market as basmati rice is fast losing the driver’s seat of export agri commodities engine. In current financial record breaking $ 50 billion agricultural commodities exports is expected but basmati rice will not dominate it. Basmati rice exports have fallen for three consecutive financial. There is no match to fragrance of long grained Indian basmati but still its export is declining. Multiple reasons are cited for this decline:
- As stated above, loss of traditional rice import markets like Iran.
- Perennial fungicide problem in European Union.
- Better returns from rival rice varieties causing drop in acreage for basmati.
- Increasing demand of basmati in domestic market.
- Increase in MSP causing rice in acreage for non-basmati rice varieties rather and drop is acreage for basmati varieties.
- Minimum support price of fine paddy and basmati rice has fallen to 20% in 2020-21 from high 153% in 1995-96. Difference between MSP of fine paddy and basmati is inching towards zero and once that eventually happens, situation will reach to the point of no return. Need is to avoid equilibrium between MSP of fine paddy and basmati rice.
- 20% of land under basmati cultivation has come under non-basmati rice cultivation within last two three years in Punjab and Haryana on account of diminishing price differentials.
- US sanctions causing loss of Irani imports.
Indian basmati in Europe
Estimated CAGR of 3.2 % between 2017 and 2023 (in European basmati rice market) is what will make Indian basmati rice exporters ecstatic as major chunk of this growth will benefit india which produces 70% of total basmati rice produced in this world. Although rice is not staple food in Europe but still it is a developing market for basmati rice. Aroma of basmati rice is enthralling Europeans also and demand for this long grain fragrant rice is rising. In 2016 European basmati rice market was was dominated by United Kingdom but of late demand for basmati rice is going up in Netherlands and Germany. Indian basmati rice exporters have only one reason to worry, as far as basmati rice exports to Europe is concerned, it is stringent norms related to trycyclazole fungicide.
Proliferation of non-basmati rice exports overshadowing basmati rice exports
Non-basmati rice exports from India is rising sharply and overshadowing basmati rice exports. Enhanced profitability of non-basmati rice exports has compelled many basmati rice exporters to shift to non-basmati varieties. Export of non-basmati varieties has rose to $6.11 billion in 2020-21 from $2.91 billion in 2013-14. This is great going. Those looking to trade both non-basmati and basmati rice online can use tradologie.com enquiry to delivery B2B platform for agri commodities.
Future challenges for Indian basmati
Egypt is issuing threats to produce and export basmati rice and challenge Indian basmati rice export market. Question arises that is this threat to be taken seriously. If Egypt keeps its word and starts basmati rice cultivation and export then few decades will be needed by Egypt to capture even a small part of global basmati rice export market, particularly India’s goodwill in the market will be too much to be overcome by Egypt. There are numerous reasons for india to not take Egypt’s threat seriously. Itself a major importer of Indian basmati rice, Egypt doubled its imports of Indian basmati rise since fiscal year 2018-19. Egypt can’t export to European countries as India possesses GI tag for its basmati rice in Europe.