Current Situation of Basmati Rice Trading Market
The rising hostilities between Iran and the USA dampen the Basmati Rice Trading in Islamic countries like Saudi Arabia, Iran, Iraq, Kuwait, and Yemen.
In the current financial year, the rising tension between Iran and the USA slows down the export growth of rice in the global market. During the financial year 2018 to 2019, Basmati exports growth worth 32,806 Crores. But it seems to be difficult to reach the figure of the current fiscal year because of the halted rice import from Iran.
Iran has been driving the growing exports of Indian Basmati Rice in the past three consecutive years in a row.
Presently, Iran has seemingly balanced its import of Basmati to its exports of crude oil to India. This has created a very uncertain situation for the exporters of rice in India.
Reasons behind Declining Rice Export Market Growth
- The exports to Saudi Arabia, Iraq, and Kuwait are also dipped in the current fiscal year due to tighter pesticide residue norms.
- On the other hand, Saudi Arabia’s newly introduced quality certification norms have become a great obstruction for the exporters of Basmati Rice.
- The Saudi Food and Drug Authority put a law that it is mandatory each rice consignment must have a certificate of conformity (COC) from an authorized agency. Now Indian exporters have an unfeasible condition for their clearance of the stocks in the world market. Saudi Arabia has also demanded disclosure of the source of rice origin.
- Since such obligations from countries like Iran and Saudi Arabia have declined the export value of India and it will be directly affected the GDP of the country in the next fiscal year.
- Payments were also late by five months in the current financial year; exporters are not ready to take any further risk.
Prospects of Basmati Rice Market Growth
- Indian Basmati Rice Exporters were expecting momentum in trade after the Government of Iran has opened a fresh tender in the month December 2019 for 200,000 tons of basmati from India.
- There is an expectation that Basmati has anticipated to grow in the coming years because some of the global Basmati Rice Buyers other than Iran have increased their purchase in the current harvesting season.