A report by US trade finance company revealed the status of India’s rice exports. Its expected to fall by over 20% this financial year.
Drip Capital, a US-based Finance Company, revealed that rice exports from India have seen a serious decline. The major dip came from Middle East countries due to high geopolitical tensions. Further, it stated that four months post rice harvest shows over 40% increase annually. However, this year’s figures have been low due to a fall in the shipment of 22% to a major importer, Iran. Also, exports to the UAE, Nepal, Yemen, Senegal, and Bangladesh decreased by 33%, 23%, 2%, 90%, and 94% respectively. That apart, exports to Saudi Arabia and Benin have registered an increase of 4% and 8% respectively.
Reasons for Fall
Rice exports from India are projected to fall by 20 % due to weak demand from West African countries. Besides, a high minimum support price has attracted farmers towards the domestic rice market. Further, geopolitical tension and financial sanctions on Iran have curbed exports from India. Rice exports make for 2% of the total export basket from India. Also, India is the world’s largest rice exporter with a 25% share in the global market. The report is concerning as rice export sector has shown a compounded annual growth rate of 14% between FY10 to FY19.
Fall in Shipments
The rice exports from India have slipped by more than a quarter to 5.5 million tonnes during April-November 2019. The exporters feared to sign new contracts due to delayed payments. As a result, exports to Iran have plunged to 600,000 tonnes in the eight months from 900,000 tonnes in the previous year.
Haryana-Tops Basmati Exporting State
The report also revealed that Haryana has exported basmati rice worth USD 2,410 million in FY19. It has made an annual growth of 3% between FY16 to FY19. Further, Gujarat made it second to the list by exporting rice worth USD 1,106 million in FY19. Also, Delhi, West Bengal, and Andhra Pradesh were the major contributing states to the country.