Basmati rice exports up on W Asia demand

Exports likely to touch an all-time high.

Export demand for basmati rice has seen a revival in the last two-three months backed by rising demand from west Asian countries. This revival comes after nearly a year of sluggish export following the imposition of Rs 8,000 a tonne export tax in April 2008 by the government as part of anti-inflationary measures. It had also imposed a minimum export price of $1,200 a tonne, which was brought down to $1,100 in January 2009.

“Demand from Iran has picked up since the local crop there is small and expensive. The removal of export tax in January has helped in increasing export,” said RS Seshadri, director, Tilda Riceland. Apart from Iran, export demand is also improving in countries like Saudi Arabia, he added.

Even realisation has improved in the export market. From $1,800-1,850 a tonne ( FoB) in January, average realisation has moved up to $2,000-2,100 a tonne.

“The major factor for this revival in demand is Iran. Price is not a factor for Iran today. They want quality rice,” said Gurnam Arora, joint managing director, Kohinoor Foods, which sells rice under the ‘Kohinoor’ brand.

Even domestic demand is strong. “We have seen a hundred per cent growth in domestic sales during the January-March quarter,” said Arora.

Demand has gone up and is predominantly led by Iran. This was expected. Anything that stays in a lull for some time is bound to go up, said Karan Chanana, managing director, Amira Foods.

India’s basmati rice exports are set to touch an all-time high of 1.8 million tonnes this year following the notification of Pusa-1121 variety as a basmati rice in October 2008. The country exported 1.14 million tonnes of basmati rice in 2008-09, according to a food ministry official. This was a dip of three per cent from the previous year’s export. Pusa-1121 is the variety which is increasingly being exported to Iran.

“The inclusion of 1121 variety of rice in basmati in October last year has expanded the size of basmati market. As a result, export this year could touch a record of 1.8 million tonnes since 1121 alone would account for 600,000-700,000 tonnes,” said Seshadri. Chanana echoed similar views on export.