India's Commerce Secretary and a high level delegation are visiting Iran this week to discuss ways to boost trade, including revival of rice trade, between the two nations, according to local sources.
The Indian officials' visit to Iran is particularly significant as the Middle East nation had banned rice imports in November 2014 citing excess stocks from last year's imports and a bumper crop in 2014, a move which has significantly affected India's basmati rice exports. Iran is a major destination for India's basmati rice exports and accounts for nearly 40% of India's total basmati rice exports. Last month, some exporters expressed confidence that India’s basmati rice exports to Iran would resume from the beginning of new financial year (2015-16) in April 2015.
The delegation will meet the Iranian Commerce Secretary and Trade Minister according to local sources. They are understood to particularly seek for the removal of ban on rice imports as well as focus on increasing project exports to Iran. India is a major importer of crude oil from Iran but its imports had declined significantly in March 2015 due to pressures from western nations. The delegation is also likely to discuss means to solve the oil import issue.
India's new Foreign Trade Policy has reportedly retained the Rupee-Riyal payment mechanism, which was initiated a couple of years ago to facilitate trade between India and Iran.
The bilateral trade between India and Iran increased by about 2% to around $15.27 billion in 2013-14 as against $14.94 billion in 2012-13.
While Iran's basmati rice imports from India increased about 33% y/y to around 1.44 million tons in 2013-14, the Middle East nation's imports have declined in 2014-15 primarily due to its stance to revise the accepted level of arsenic content in basmati rice from 150 parts per billion (ppb) to 120 ppb in March 2014. Later in September 2014, Iran also increased import duty on basmati rice from 22% to 45% before banning rice imports in November 2014.
India exported around 767,697 tons of basmati rice to Iran in the first ten months of FY 2014-15 (April - January), according the Agricultural and Processed Food Products Export Development Authority (APEDA). At this pace, rice market analysts expect India's basmati rice imports to Iran to decline by about 15-20% to around 1.15 - 1.2 million tons in 2014-15.
India exported around 9.57 million tons of rice (including 2.92 million tons of basmati and 6.65 million tons of non-basmati) in the first ten months of FY 2014-15 (April - March), up about 7% from around 8.96 million tons (including 3.09 million tons of basmati and 5.87 million tons of non-basmati) exported during the same period in FY 2013-14, according to provisional data released by the APEDA.
Source:-oryza.com
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