Rice contributes over two percent of the overall exports from India. The particular industrial sector had declared a CAGR of 14 percent (compounded annual growth rate) between the Financial Year 2010 and 2019. Presently, it has been observed that a sharp decline in the rice market price in the current Financial Year. Detailed analysis of the market growth trends are given below:
Major Reasons behind the Drop-in Market Price
- The weak demands from the West Asian Countries are likely to affect the global rice industry market. As per research work, rice export may fall by 20 percent in the current fiscal year.
- Iran was one of the largest importers of rice from India. In the past three consecutive financial years, a large volume of rice was exported from India. In the current financial year, Iran restricted the import of rice from India due to geopolitical issues and financial sanctions.
- The heightened geopolitical tension between Iran and the USA has declined the export market growth in the current financial year.
- The tighter trade norms from other West Asian countries like Iraq, Saudi Arabia, and Yemen also responsible for the drop in rice export market value.
- According to the research survey, the sharp fall in the prices of the global market will also responsible for the decline of the Indian rice export market growth.
Indian Basmati Rice Market Trends
Indian Basmati Rice also has a slow market growth trend in the current Financial Year. With Iran, the country’s biggest export destination for Basmati Rice, putting a halt on Basmati Rice export from India because of geopolitical issues. Popular India’s premium rice exports could decline in the current Financial Year in terms of volume. From the industrial sources, the shipment of the rice is also in decline mode from the last three consecutive months.
Indian Rice Export Market Analysis
Rice shows a clear seasonal pattern for exporting; the four months of the post-harvest period from December to March is the best exporting period of rice. Every year, about 40 percent of total annual exports were shipped at a particular time. But the current financial year (FY 2019-2020) rice export figures have also been trending much below the previous year’s performance. According to market watch, approximately 20 percent decline in the shipment of rice.
The downwards trends India’s export to other countries are as follows:
- UAE-33 Percent
- Nepal-23 Percent
- Yemen-2 Percent
- Senegal-90 Percent
- Bangladesh-94 percent
Meanwhile, the Government of India is trying to overcome geopolitical issues. A team from Commerce ministry will try to solve the issues between Iran and the USA in the next coming months. Hopefully, the situation will be normal soon with the possibility of reviving the rice export market. Indian traders are expecting the move is likely to boost the Indian Basmati Rice market again.