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Saturday, April 20, 2024 14:24 GMT
The US-Iran standoff and the recent coronavirus outbreak in China are among factors which, it is thought, could pull down Indian rice exports by about a fifth this year. Export of rice, especially basmati, to Iran was valued at US$1.5 billion (about Rs 10,500 crore) in 2018-19. It accounts for 25%-30% of annual Indian rice shipment. Indian rice export had a compounded annual growth rate (CAGR) of nearly 14% between 2010 and 2019. We account for a fourth of global rice export; it contributes two% to the overall Indian export basket.However, goes a report by US-based trade finance company Drip Capital, rice export this year has fallen across the globe, with a major dip emerging from West Asia, due to geopolitical tensions. The report is based on analysis of proprietary data and on-ground conversation with exporters.“YTD (year to date) export is so far looking bleak, with Iran, the biggest export market, seeing a 22% fall in shipment,” said Drip Capital co-founder and co-chief executive, Pushkar Mukewar.Devendra Vora, a Mumbai-based rice trader and exporter, said shipment to Iran had been tepid since October 2019 due to the US-Iran crisis, with no respite in sight.“Annual rice export to Iran is to the tune of more than 10 million tons (mt). There is a strong possibility of these falling by almost 2 million tons,” he told Business Standard, adding traders holding stocks were staring at a loss.Kohinoor Foods joint managing director Gurnam Arora said since Iran was the major destination for Indian rice export, the situation would certainly reflect in lower shipment, stating: “I see a 20% dip this year, given the adverse global market sentiments, accentuated now by the coronavirus outbreak and reflecting in slowing international trade.” Many other international markets for Indian rice, he added, had been down over several months.Haryana is India’s top basmati rice exporting state, with a CAGR of three% during 2016-19, shipping US$2.4 billion in FY19. Gujarat was second in FY19, with US$1.1 billion and a CAGR of 47% during 2016-19. Other major contributors are Delhi, West Bengal and Andhra.Arora suggests the central government discuss rice export with Brazil. “If it pushes the matter properly, there is a possibility of almost 1 million tons of rice shipment; Brazil is a big consumer of food grain, including rice and wheat,” he said.Around 40% of the export takes place in the four months from December to March. The UAE, Nepal, Yemen, Senegal and Bangladesh are other major destinations for Indian rice but have showed a dip in shipment this financial year. Export to some countries has seen some growth — Saudi Arabia (4%), Iraq (10%), Benin (8%) and America (4%). - Business Standard