After three years of downfall, the Basmati rice export of India showed a growth in the present fiscal. In the first three months of FY2017-18, is has been a 32% growth of the Basmati rice exports with a 25% hike in realization and a 7% increment in the volume of shipments.
As the exports volumes were high in the yesteryears, by the realization pressure margins have been impacted. In FY2014, the realizations were at a high of Rs.77, 988 /tonne and in FY2017 fell down to Rs.54, 011 /tonne. The main reason of decrease is the global demand was low and the rice prices also fell in the seasons of FY2015 and FY2016.
This year the Basmati rice exports are increasing mainly due to a high demand from Iran said by the financial experts from ICRA. From Middle East countries the countries are the largest importers of rice and by their demand effects the exports. The second largest importer of rice is Iran and the transfer prohibit that happen time and again keeps the requirement from the middle-eastern country unpredictable. To a giving a demand equivalent to 40% of the total basmati rice exports, Iran remained a major contributor of India.
From August 2017, from India, Iran has stopped the basmati rice import. Around the procurement season, Resumption of imports by Iran, which is anticipated and it would be critical for the overall demand for basmati rice. In the upcoming season, any delays in the same could dampen the paddy procurement as well as subdue the exports outlook for H2FY2018 (second half of 2017-18) and FY2019. In the light of the decline in volume sales, this is especially material another key market – Saudi Arabia,” said by ICRA.
As the production was little low, in the procurement season of October – December 2016, by 20%-25%, the basmati prices had increased across the varieties. In the major basmati producing states of Haryana and Uttar Pradesh, in the present season till the mid-September rainfall has been less. The water reservoirs are also showing levels lower than last year in Uttar Pradesh.
ICRA told that in the current crop season, these factors can translate into lower paddy production and thus the paddy prices are likely to open firm in the oncoming procurement season.
ICRA anticipates that import ban from Iran and boredom in requirement from other primary countries will be left behind and the exports will achieve around 4.1 million tonnes in FY 2018 which will be 4% greater than the last financial.