Basmati Rice exports growth to moderate in FY20

Indian rice export prices slipped this week as demand from Africa remained sluggish. Prices of 5% broken parboiled variety in top exporter India were quoted at around $371-$375 per tonne this week, down from $373-$379 a week ago, Reuters reported.

India’s rice exports plunged 26.5% in April-July from a year ago to 3.14 million tonnes, a government body said earlier this month.

However, Indian basmati exports are facing headwinds in the current fiscal, after two years of strong growth, rating agency ICRA said in a research note.

The ICRA note says that with uncertainty over level of exports to Iran as well as likely moderation in average export realisations, basmati rice exports are expected to be muted in FY2020. This is after basmati rice exports in FY2019 were at an all-time high at Rs. 32,806 crore, primarily led by aggressive buying by Iran, that enabled healthy growth in volumes besides favourable pricing.

Elaborating further, Mr. Deepak Jotwani, Assistant Vice President, ICRA, says, “There is increased uncertainty over level of imports by Iran going forward in light of ongoing trade sanctions; and tighter pesticide residue norms continuing to weigh on exports to European Union (EU). Also, some changes in import policies proposed by Saudi Arabia are likely to come into effect by the end of the year. While EU is a comparatively smaller market, Iran and Saudi Arabia are leading destinations, accounting for 50-55 per cent of Basmati rice exports from India.”

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