Record-Breaking Exports in Fiscal 2024
Basmati rice exports have soared to new heights in both volume and value in fiscal 2024. Recent data reveals that from April 23’ to February 24’, shipments surpassed $5,2 billion, with volumes reaching an unprecedented 4.67 million tonnes. As the fiscal year concludes with March’s data, these figures are expected to set new records.
Geopolitical Tensions Pose Challenges
However, the ongoing geopolitical tensions in the Middle East, a region that absorbs over 70% of India’s basmati exports, are casting a shadow over future shipments. The recent conflict between Iran and Israel is particularly concerning, with trade experts apprehensive about its potential impact on Indian exports. The region’s instability, including recent attacks in the Red Sea area, has escalated shipping costs and extended transit times to key markets like Europe and the US, further complicating the trade landscape.
Potential for Rising Prices and Demand
Despite these challenges, some analysts predict that the turmoil could inadvertently boost exports and prices. S Chandrasekaran, a trade analyst and author, suggests that while Iran and Iraq currently have ample rice stocks, other Gulf nations such as Saudi Arabia, Oman, Qatar, and UAE may face shortages. This could trigger a new wave of export orders for Basmati rice, potentially driving prices higher due to increased demand and the associated risk premium.
“In this fiscal year, Iran is expected to increase its rice purchases by 30%, with the specific proportion of Basmati rice imports hinging on the Iranian government’s food policy,” Chandrasekaran explained.
Detailed Export Insights
During the April 23’ to February 24’ period, Basmati exports increased by 22% in value terms compared to the previous year. Saudi Arabia remains the largest market, with imports worth over $1,1 billion, up from $920 million last year. The volume of exports to Saudi Arabia also grew, totaling 0.96 million tonnes compared to 0.85 million tonnes the previous year.
Iraq has risen as the second-largest buyer, with both the volume and value of imports more than doubling from last year. Iraqi purchases of Indian Basmati tallied at 0.70 million tonnes, valued at $757 million, significantly higher than last year’s $321 million.
Meanwhile, Iran has moved to the third position, with a decrease in both the volume and value of imports. Shipments to Iran dropped to 0.64 million tonnes, accumulating $652,70 million, down from $911,02 million in the same period last year.
As the fiscal year wraps up, the Basmati rice market faces both unprecedented opportunities and formidable challenges, shaped by dynamic global forces and regional market demands.