Urgent Appeals and Export Ban Impact
India’s prominent rice exporters find themselves grappling with urgent appeals from buyers to accelerate shipments of basmati rice. The cause of this urgency stems from the recent imposition of a ban by the Indian government on non-basmati rice exports. The Indian government has taken this step to suppress inflation in the local market, following significant crop damage due to heavy monsoon rains. This unexpected move has raised worries among buyers, leading them to fear possible restrictions on basmati rice exports as well, thereby seeking early deliveries.
Retail rice prices had witnessed a sharp 3% spike within a month due to the substantial crop damage caused by the belated, yet torrential, monsoon downpours. The countries primarily importing non-basmati white rice, such as Senegal, Benin, Togo, Bangladesh, and Cote d’Ivoire, bore the brunt of the export ban.
Buyer Urgency and Exporter Assurances
Leading the charge in this demanding market, Atul Garg, the managing director of GRM Overseas, has acknowledged the growing urgency among buyers to accelerate their shipments. This stems from the fear that the government might impose restrictions on basmati rice exports as well. While customary agreements between buyers and exporters involve long-term contracts to ensure a regular supply of rice each month, the current scenario has compelled certain buyers to request shipments in August, which were initially scheduled for September and October.
In the year 2022-23, India’s total export of basmati rice was approximately 4.5 million metric tons. Saudi Arabia, Iran, Iraq, the United Arab Emirates, Yemen and the United States were the prominent buyers. To allay the concerns of anxious buyers, exporters have been actively assuring them that there are currently no intentions to impose a ban on basmati rice exports.
Optimism for Basmati Rice Production
In the previous year, India had sprung a surprise on the market by imposing a ban on wheat exports, which was later followed by restrictions on sugar and rice exports. Despite facing these unforeseen challenges, Vijay Setia, one of the exporters based in New Delhi, remains optimistic about the potential increase in basmati rice production in the current year. He highlights that an increasing number of farmers in Uttar Pradesh are transitioning from non-basmati to basmati rice cultivation, enticed by the higher prices offered for the latter.
Majority of basmati rice are cultivated in northern states of Punjab, Haryana, Uttar Pradesh, and Himachal Pradesh has encountered a hurdle earlier this year, when these regions were inundated with heavy rainfall. In the year 2023, the expansion of basmati rice growing areas are leading to optimistic predictions of higher production levels compared to the preceding year. As exporters and farmers alike remain vigilant, their hopes rest on stable conditions and a smoother export process for the coveted basmati rice variety.
Conclusion
The ban on non-basmati white rice exports has prompted urgent appeals from buyers for early shipments of basmati rice, while exporters assure them of no restrictions on basmati rice exports, hoping for a smoother export process. As of now, there is no need to be anxious about ban on basmati rice exports and one can procure basmati rice in present market conditions.