Pak competition may hit India’s basmati rice exports

Aromatic basmati rice exports from India may dip by 10 per cent to 1.8 million tonnes in the 2010-11 fiscal due to the increased competition posed by neighbouring Pakistan’s produce in Europe, a trade body said. “Total basmati rice export in both volume and value terms are expected to fall by 10 per cent from a year earlier. Exports volume may fall to 1.8 million tonnes,” All-India Rice Exporters Association President Vijay Setia told reporters.

Mr. Setia attributed the slump in exports to growing competition from neighbouring Pakistan in Europe due to pesticide concerns. “Indian farmers are spraying pesticide even after the flowering stage of the crop. And the EU is objecting to this,” he said. In addition, Indian exporters are not keen to export basmati to Iran -- one of their biggest markets -- due to delays in receiving payment for shipments on account of sanctions imposed by the U.S. and United Nations against the Middle East nation over its suspected nuclear programme, said Mr. Setia.

“Iran payment is coming very slowly as it is being routed through Dubai. As a result, it is affecting our market and realisation,” he said. In the 2009-10 fiscal, the country shipped 2.01 million tonnes of basmati rice, mainly to the UAE, Iran, Saudi Arabia, Europe and the US. The export realisation from overseas shipments of Indian basmati was Rs. 10,838 crore last fiscal, he said. In terms of value, exports were down by Rs. 2,500 crore in the review period. The value realisation was $ 1,060/tonne in the first ten months of the current fiscal, compared to $ 1,160/tonne in the same period last year, it said.

Meanwhile, the agri-export promotion body APEDA had recently said India’s total basmati rice exports in the entire 2010-11 fiscal are unlikely to be lower than last year, though a decline in shipments was seen for a brief period in 2010. According to the crop survey conducted by Apeda, total basmati rice production is estimated at 7 million tonnes in the 2010-11 crop year, almost 10 per cent higher than the output of 6.4 million tonnes recorded in the previous year.