Basmati rice exports increased significantly in volume and value during the fiscal year 2024. The most recent data shows that shipments from April to February exceeded $5.2 billion, with volumes surpassing 4.67 million tonnes, a record high.
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India's Basmati Rice Exports Geopolitical Scenario
Over 70% of basmati exports are to the Middle East, a crucial market where ongoing geopolitical tensions raise concerns, even though the fiscal year's total exports are expected to set a new record once the figures for March are taken into account.
According to trade sources, the recent regional conflict between Israel and Iran could present serious difficulties for Indian exporters in the upcoming fiscal year. Since it is unclear how the situation may affect exports of basmati rice, it is being closely watched.
Analysts do think that increased exports and prices could be a consequence of the ongoing tensions.
Currently, nations like Iran and Iraq have enough oil to withstand any geopolitical repercussions, but other Gulf states like Saudi Arabia, Oman, Qatar, and the United Arab Emirates might run out. This may result in a new wave of export orders for basmati rice, which would raise prices because of the extra demand and risk premium.
Rise In Basmati Rice Exports
The trade analyst S. Chandrasekaran, who authored the book "Basmati Rice: The Natural History and Geographical Indication," predicts that Iran will buy 30% more rice in the current fiscal year. The food policy of the Iranian government will determine the proportion of imported basmati rice.
The value of shipments of basmati saw a 22 percent increase from April to February. The biggest purchaser, Saudi Arabia, brought in over $1.1 billion worth of basmati rice this year, up from $920 million during the same time last year. Volume-wise, exports to Saudi Arabia increased from 8.51 lakh tonnes to 9.61 lakh tonnes.
Iraq became the second-biggest purchaser, more than doubling in both volume and value over the prior year. Iraq imported 7.02 lakh tonnes of basmati rice from India between April and February of this year, up from 3.13 lakh tonnes the previous year. Shipments of basmati to Iraq totaled $757 million, up from $321 million during the same time previous year.
Iran, which was the second-biggest purchaser last year, is now in third place as a result of shipments falling in value from 9.27 lakh tonnes in January to 6.44 lakh tonnes in April through February. From April to February of this year, basmati exports to Iran brought in $652.70 million, a decrease from $911.02 million in the same period previous year.
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