CHANDIGARH: The ongoing conflict between Israel and Iran has put the basmati rice industry in India in jeopardy. India is the largest exporter of basmati rice in the world with 40 per cent of the country’s exports coming from Punjab. About 25 per cent of basmati rice exported from the country are sent to Iran. However, the export is affected due to the uncertainty as it has banned imports for two months from October 21 to December 21 to support its local crop. Insurance companies have stopped giving insurance on exports to Iran. Thus, the prices of basmati have fallen by Rs 800 per quintal as the exporters and millers are no longer purchasing the quantum as they were earlier buying, leaving the farmers worried.A 15 per cent surplus crop is expected this year which has further compounded the crisis. Thus, it is a double whammy for the basmati rice exporters and farmers of Punjab. India is the largest exporter of basmati rice in the world during 2023-24: 5,242,048.39 metric tonnes of Basmati rice, valued at Rs. 48,389.18 crore (USD 5,837.12 million) was exported worldwide with 40 per cent of country’s basmati exports coming from Punjab. However, compared to last year, the prices of Basmati have fallen down this year. Last year, 1509 varieties of Basmati were sold for Rs 3500 per quintal and now it is being sold at Rs 2,700 per quintal at a loss of Rs 800. As a result, farmers are suffering heavy losses, and concerns are evident among basmati rice exporters.Talking with this newspaper, Punjab Rice Millers and Exporters Association Vice President Ranjit Singh Jossan claimed that since insurance companies have stopped providing insurance on exports to Iran, the possibility to export to has been stopped.”About 25 per cent of basmati rice exported from India is sent to Iran which has banned the import of India from October 21 to December 21 to support its local crop, which has halted Basmati exports to Iran for two months. On the other hand insurance companies have stopped giving insurance on exports to Iran. We are requesting the government to ask the insurance companies to give us insurance so that we can export to Iran and thus the farmers are not affected as prices have fallen down,’’ he said. “The ongoing conflict between Iran and Israel has created major concerns for basmati rice exporters and farmers. In response to the demands of basmati stakeholders, the union government last month provided significant relief by completely abolishing the MEP (Minimum Export Price) on basmati,’’ he said. He mentioned that the ongoing war between Russia and Ukraine for the past two years has caused widespread export issues.”Saudi Arabia, a major importer of Basmati rice, imports 1 million tons from India and has a significant seaport in Jeddah, close to Yemen. Ships travelling this route face threats from Houthi rebels in Yemen, which previously created difficulties in the Red Sea. Additionally, the current tensions involving Israel and Iran may lead to higher sea freight costs, potentially impacting basmati rice exports,’’ said Jossan. Jossan claimed that this year 15 per cent more basmati crop is expected due to which basmati exporters of India may have to face big challenges. Apart from Punjab and Haryana, in recent years basmati cultivation has increased in Uttar Pradesh, Rajasthan and Madhya Pradesh. “As per a survey conducted by the Basmati Rice Exporters Association of India last month, the Basmati crop in the country is expected to be 14 to 15 per cent higher this year. Last year due to high sea freight costs, MEP and other issues, one million tonnes of basmati rice remained unsold till October 1. This year 15 per cent surplus crop has created an atmosphere of uncertainty among basmati exporters,’’ he says.
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