Increase in Basmati Rice Prices Concerning: AIREA

Nathi Ram Gupta, President All India Rice Exporters Association (AIREA), released a statement on increase in basmati rice prices. AIREA cautioned rice millers and exporters regarding the recent surge in prices of basmati rice. AIREA emphasized further on payment risks involved in export of rice to Iran.

AIREA’s Advisory for Basmati Rice Exporters

The report suggested an abrupt spike in Basmati paddy and rice costs despite no such incidents in the global market. Accordingly, the rice cost increased by Rs 300 per Quintal and paddy cost has increased by Rs 150 per quintal. Further, it also notified that the consignments of Basmati Rice held at the Iranian ports have regained flow. This news provides a sense of relief to the rice exporters.

Despite the relief, the advisory forewarned exporters about trading with Iran. A meeting organized with Secretary and Additional Secretary of Department of commerce resolved that there are no guarantees on dealing with Iran. After the meeting officials clearly stated no assurances regarding the payments from Iran for exports. Thereby, creating a sense of alert among the exporters as mentioned above.

Raising the alert, AIREA also mentioned that money of exporters held up in Iran estimated at Rs 5000 crore in UCO Bank and Rs 6500 crore in IDBI bank. However, experts from AIREA predict no gain for exporters. As they foretasted that these amounts will soon be depleted, if and when they are released. In addition to that, the ambiguity regarding the use of these funds for the sole purpose of rice export was highlighted.

AIREA’s Request for Caution

Through this letter, AIREA’s President Nathi Ram Gupta advised the members to have a grip on the prices of the Bamati Paddy and Basmati Rice. An abrupt and extreme rise in basmati rice prices would have a negative influence on trade. Further, it was accentuated that in the future basmati rice export to Iran must be dealt with extreme caution.

The Iran Payments Issue

Approximately, India exports more than 1 million tons of Basmati rice to Iran. Ever since US sanctions on Iran’s crude oil, Indian exporters are in fray over payments from Iran. Payments from Iran come through the Rupee mechanism via UCO Bank and IDBI bank. Since India stopped importing crude oil from Iran, exporters expected recovering payments from Iran would be a problem in the coming months. However, payments started getting delayed from June 2019 and finally funds released this week.

Experts suggest a bumper crop of basmati rice FY 2019-20. If basmati rice millers start purchasing paddy at these high prices they will suffer losses in the coming months. The basmati rice industry is already suffering from huge bad debts owing to speculation and unstable prices of the commodity. In conclusion, rice millers should be very careful about the basmati rice prices.

One thought on “Increase in Basmati Rice Prices Concerning: AIREA

Leave a Reply

Get Verified Suppliers of Rice, Wheat, Dry Fruits, Pulses and Other Grains