Latin America opens doors to Indian basmati rice for first time ever

A new front has been opened for the export of basmati rice as Latin America (LatAM) has opened doors to Indian basmati rice for the first time. The LatAm countries have sent import enquiries to Indian basmati exporters who said consignments will leave Indian ports in December.

This new market has come as a relief to Indian exporters as they have lost a major market, Iran, due to payment issues.

“Earlier Latin American countries were dependent on supply of rice from the US. But now they have turned their eyes to India and are placing orders with our rice exporters,” said Vinod Kaul, executive director, All India Rice Exporters Association.

Basmati rice prices have shot up this year as unseasonal rains in September impacted the standing crop. Prices are already up by 20%-40% since the supply of quality basmati rice is down by almost 15%-20% this year compared to last kharif.

Iran has been the major destination of Indian basmati rice over the years. But after the US sanctions on Iran, payment became irregular and there was delay in getting payment from the Iranian buyers.

Under the India-Iran trade deal, local oil refiners used to import crude oil from the Middle East nation and make payments to the designated rupee account at UCO Bank. There has been no inflow of funds into the account as there was no import of crude oil by India. India stopped importing oil from Iran in mid-2019 following sanctions on Iran imposed by the Donald Trump administration.

Iran recently withdrew the seasonal ban on import of rice. Every year, after its own harvesting is over, ..

Kaul said exporters are waiting for a breakthrough in the payment crisis with Iran. “Though some payments have come, many exporters are yet to get their full payment,” he said.

According to the AIREA official basmati rice exports may come down by 20 per cent in FY22 from 4.6 million tonne in FY21. However, Arora of Kohinoor Foods held India will be able to achieve last year’s figure as exports are expected to go up in the next four months.

The Economic Times

Tags: rice, India