Buyers Request Exporters to early Shipments of Basmati rice



 India is the largest exporter of rice in the world.  India alone accounts for 40% of the world's total rice exports.  India exports rice to about 132 countries.  But the Indian government stopped exports of non-basmati rice in July.  As a result of the tsar, various countries are under the threat of rice shortage.  And besides, India's rice exporters are facing problems.  Rice importing buyers are looking forward to early shipment of rice.  They fear that the government may also impose restrictions on basmati rice exports.

On July 20, 2023, the Government of India imposed restrictions on the export of non-basmati rice.  This year, paddy production has decreased due to erratic weather conditions in India.  The price of rice in the Barte retail market has risen by 3% in the past one month.  The government has taken this decision to control domestic rice prices.  Even though the government has banned the export of non-basmati rice only, basmati rice exporters are worried.  Mainly basmati rice is grown in the northern states of Punjab, Haryana, Uttar Pradesh and Himachal Pradesh, but which were flooded this year due to extremely heavy rainfall.  Due to this, the production of paddy is also expected to decrease.

 But Vijay Setia, an exporter, said the area under basmati rice has increased in 2023 and production is likely to be higher than last year.  Many farmers have increased the cultivation of Basmati rice as Basmati rice is more profitable than non-Basmati Basmati rice.

India has exported around 4.5 million metric tonnes of Basmati rice in FY 2022-23.  Major destinations for basmati rice are Saudi Arabia, Iran, Iraq, United Arab Emirates, Yemen and the United States.  And India exported non-basmati rice around 17.26 million metric tons in FY 2022-23.  The main destinations for non-basmati rice are Senegal, Benin, Togo, Bangladesh, and Côte d'Ivoire.

In the meantime, basmati rice buyers are requesting for early dispatch of their signed consignments.  Buyers usually sign contracts promising to send a certain amount of rice every month. However, some buyers are now requesting their shipments to be sent in August instead of September and October.  "Buyers are requesting early shipments as they fear the government may also impose restrictions on basmati rice exports," said Atul Garg, managing director of GRM Overseas (GRMO.NS), a major exporter of basmati rice.  Again, an exporter from Delhi said, "We are assuring the buyers that there is no possibility of a ban on basmati rice exports but some buyers are scared due to the recent decision of the government."  India suddenly banned wheat exports in 2022 and later banned exports of sugar and pulses.  Due to these reasons, various buyers and exporters fear that the government may stop the export of basmati rice.  India has never imposed an export ban on basmati rice in the past but imposed a tax on exports in 2002.


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