According to government and industry authorities, India's basmati rice exports fell by a fifth from a year before to the lowest level in four years in 2021, as key importer Iran cut purchases as its rupee reserves deteriorated.
According to government data, basmati rice exports in 2021 plummeted 20% from the previous year to 4 million tonnes, the lowest level since 2017.
According to the report, shipments to Iran, India's largest consumer of basmati rice, fell 26% year on year to 834,458 tonnes.
"Iran was not active in the market for a few months last year after its rupee reserves with Indian banks depleted," said a Mumbai-based dealer with a global trading house.
Iran previously agreed to sell oil to India in exchange for rupees, which is used to import critical goods such as agricultural commodities, but New Delhi stopped buying Tehran's oil in May 2019 after a US sanctions waiver expired.
Tehran continued to use its rupees to buy goods from India, but without crude sales, which depleted Iran's rupee reserves.
Decline in Export:
Exports slowed in the middle of 2021, but buying from Iran, Saudi Arabia, and other key buyers has increased in the last two to three months, according to Vijay Setia, former president of the All India Rice Exporters Association (AIREA).
India, the world's largest rice exporter, primarily exports non-basmati rice to African countries while also exporting premier basmati rice to the Middle East. Total rice exports increased nearly 46 percent year on year in 2021 to a record 21.42 million tonnes, thanks to increased purchases from Bangladesh, China, and Vietnam.
According to Setia, basmati rice production in 2021 will be down around 15% from the previous year due to lower area and untimely rainfall during harvesting season. "Export prices of basmati rice have increased by 20% due to lower production, but demand remains strong for February and March shipments," Setia said.
