Basmati Rice demand from EU soared over 70% in FY 2020-21. Increased demand from countries including Belgium, Italy and Netherlands supported the basmati rice industry amid uncertainty over export to Iran. This led to an increase in basmati rice prices by 10% in the past two months.
The industry has been dependent on Iran which imports over a million tons of basmati rice every year. India produces over 7 million tons of basmati rice yearly. Out of the total production 60% is exported and 40% sold in the domestic market.
Lockdown in Many EU Countries Urged Importers to Stock
Many countries in EU imposed lockdown over rising COVID-19 cases. This led to many EU importers stocking essential commodities and panic buying. India exported 231,930 Metric Tons of Basmati Rice to EU from April 2020 to November 2020.
Exports to EU surged significantly if you compare export from April 2019 to March 2020 which stood at 219,176 Metric Tons. According to reports from experts, export picked up further in December 2020 and January 2021. In addition, we expect basmati rice export to surpass 4 Lakh metric tons this financial year.
Pakistan’s Increased Export of Basmati Rice to EU
Pakistan’s export of basmati rice to European Union doubled in the past three financial years. Total exports by Pakistan to EU in 2017 stood at 120,000 Metric Tons. However, it surged to more than 300,000 Metric Tons in 2019. EU’s pesticides restriction on Indian Basmati rice was the reason behind Pakistan taking over major share of EU market.
In conclusion, India’s surge in export to EU most likely to have an adverse affect on Pakistan’s basmati rice export industry.