Basmati exports to fall 10%

This year's Basmati rice exports from India might drop 10 per cent compared to last year, mainly on account of lower exports to Iran. Overall rice exports are set to suffer with Thailand set to become the top rice exporting country in the world, replacing India. The fall has resulted in Basmati losing the top-exporting commodity tag in the agri-basket to buffalo meat. Basmati is now No 2 in the export basket.

Iran accounts for one-third of Basmati rice exports from India. Recently, Iran introduced new norms for import, which required local registration and issue of certificates, pertaining local registration and safety standards.

In the April-October 2014 period, India's overall Basmati exports were down 10 per cent in terms of volume over the year-ago period at 1.8 million tonnes (mt). However, lower domestic production has kept prices high. Thus, despite a drop in volume, the realisation from exports during April-October 2014 was flat at Rs 15,789 crore, against Rs 15,543 crore in the year-ago period.

At the same time, the exports of non-Basmati rice remained flat between in terms of both volume and realisation at 4.5 mt and Rs 11,569 crore, respectively.

Last year, India exported 3.7 mt of Basmati rice valued at Rs 29,299 crore. Of this, the share of Iran alone was nearly 1.4 mt. This year, India's Basmati rice exports to Iran could be close to one million tonne, according to Rajen Sundaresan, executive director, All India Rice Exporters' Association.

"There has been a slowdown in Basmati rice exports this year. Our exports could be down by 10 per cent over the last year. One of the main reasons being lesser exports to Iran, which had imported more than required rice last year. Also, they have introduced new standards for imports," said Sundaresan.

  According to a report by the Food and Agriculture Organization (FAO) in October 2014, among exporters, Thailand was seen to be re-establishing its position as the world's leading supplier of rice. In the previous year, India was the world's biggest exporter of rice. According to FAO estimates, in 2015, Thailand is likely to regain the No 1 position with 10.6 mt of rice exports, followed by India at eight mt (including Basmati and non-Basmati).

However, according to government estimates, India will export 10.10 mt of rice (Basmati and non-Basmati) in 2014-15, against 10.14 mt in 2013-14.

India's total rice production in 2014-15 is pegged at 105 mt, against 106.5 mt in 2013-14, according to a government report of January 2015.

According to the FAO report, in 2014-15, global rice production might touch 744.4 mt, marginally (0.4 per cent) lower than the 2013 estimate.

The report says lower production is linked to the poor performance of crops in Asia, where production is forecast to fall by close to five mt, or 0.7 per cent. If confirmed, this would be the first contraction (albeit modest) registered by the region since 2009, the report said. Also, much of it would be associated with a 2.4 per cent decline in India, following an irregular pattern of the monsoon.