Rice exporters seek urgent relief as Iran crisis disrupts exports, shipping

International freight rates have risen by an estimated 15-20 per cent, while war-risk surcharges and insurance premiums for Gulf-bound shipments have increased significantly

With Indian basmati rice prices dropping by almost 7–10 per cent in the last 72 hours due to disruptions in West Asia, rice exporters have sought urgent government support to mitigate the impact of shipping disruptions triggered by the crisis and instability across key maritime routes.

 

In a representation to the Agricultural and Processed Food Products Export Development Authority (Apeda), the Indian Rice Exporters Federation (IREF) said exporters are facing an acute shortage of containers, suspension or cancellation of vessel calls to West Asia, and sharply higher logistics costs.

 

International freight rates have risen by an estimated 15–20 per cent, while war-risk surcharges and insurance premiums for Gulf-bound shipments have increased.

 

 

Bunker fuel costs have also climbed, with marine fuel oil prices rising to around $580 per tonne from about $520, it said.

 

Sources said Indian basmati prices in international markets have softened by around $50 per tonne as shipping costs have increased by almost $200 per tonne due to the conflict. However, several traders believe the fall in basmati prices is temporary and could reverse once shipments normalise.

 

Indian basmati prices in international markets had already declined earlier this year due to oversupply. “Our exporters cannot absorb abrupt freight, fuel, and insurance shocks while shipments are delayed or rolled,” IREF Vice-President Dev Garg said. He called for time-bound relief measures and clear advisories to safeguard export contracts, cash flows, and India’s export commitments.

 

Among the key measures sought is a waiver of port-related charges, including storage and demurrage, in cases where cargo is rolled over due to vessel cancellations or steep freight increases beyond exporters’ control.

 

The federation has also requested facilitation to allow cargo in transit to be returned, redirected or diverted, with support from Customs authorities and the Reserve Bank of India for documentation and payment adjustments.

 

Further, exporters have sought an official advisory from the government or Apeda recognising the disruption as a force majeure-type event, which they say would help prevent contractual penalties.

 

The federation has also urged temporary banking relief, including ad hoc working capital limits and credit extensions similar to measures provided during the Covid-19 pandemic.