India's rice exporters may end the current fiscal on a damp note as Iraq has doubled the import duty to 40%, while Iran has clamped an outright ban at a time when price realisation has slipped 15-20% in overseas markets.
A senior official of All India Rice Exporters' Association (AIREA) told ET that traders are currently shipping only rice consignments with permits of last year to Iran. "We are hoping that Iran will lift the ban. We are planning to send a delegation to Iran in early February to sort out the issue," said the official, requesting not to be named.
The official added that the sudden increase in import duty by Iraq has come as a major blow and it is bound to impact exports to the country.
According to an estimate by exporters, basmati shipments are likely to come down to 35 lakh tonne from 37 lakh tonne in the previous year.
Iran has barred rice from other countries as its local crop is reported to be good this year and is set to arrive in the market there.The country imported over 12.5 lakh tonne of rice during April-July 2014, compared with 14.5 lakh tonnes in the year-ago period.
In the past two years, Iran has bought over 2.5 million tonne of basmati rice from India. The average price realisation has declined to $800-1,100 per tonne from $1,0001,300 per tonne last year.
Exports of basmati rice in the first seven months of the current fiscal declined over 8% to 19.36 lakh tonne from 21.13 lakh tonnes in the year-ago period. However, exports of non-basmati rice between April and October 2014 stayed almost the same as in the previous year, at about 4.2 lakh tonne.
The lacklustre export demand of basmati rice has pushed down prices in the domestic market as well, with farmers getting Rs 3,200 per quintal for Pusa 1121 crop, compared with Rs 4,100 last year.
Retail prices of basmati rice may fall further in the domestic market if exports slump, said Bal Krishna Mittal, managing director of Gurdaspur Overseas, which deals in basmati rice.
Output of basmati rice in the kharif, or summer, season in 2014 was robust at about 81 lakh tonnes, up from 66 lakh tonnes in the previous year.
Source:economictimes.indiatimes.com
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