Rice import by Tehran has increased from Thailand & decreased from India
In the present year 2023, rice import by Iraq from India has reduced by more than 27% from January – April. On the other hand, this gap is filled by Thailand and showed an increment of 57%. Import by Tehran was about 0.8 Million Tonnes during the same period. Iraq imports of rice will likely increase to 2.2 Million Tonnes this year, the US Department of Agriculture (USDA) has said. Bangkok Post quoted Ronnarong Phoolpipat, Director-General of the Thai Foreign Trade Department said, Iraq is the top importer of Thai rice, accounting for 16.4% of the 2.06 mt of the shipments during January-March in 2023.
Iraq is buying Thai rice due to consumer preference for non-fragrant rice and currency problems
Since 2022, Thailand has become the main supplier to Iraq after losing market share to India and Vietnam since 2014, the USDA said. “Iraq has reduced its purchases of Indian rice due to consumer preference of non-fragrant white rice from Thailand,” it said. Though Thailand has become the top exporter of rice to Iraq since last year, Tehran is buying Thai rice due to currency problems.
Basmati rice, which is one of the finest quality rice, its export to Iraq has dropped by over 45% over the last two fiscal years from 0.6.5 Million Tonnes in 2020-21, Data from APEDA shows this. Also, exports have dropped mainly on the fragrant rice’s prices rising to over USD 1000 per tonne. Presently, Indian Basmati rice is quoted at around USD 1500 per tonne.
“Indian rice is far more competitive than Thai rice. But Basmati cannot be compared with other rice,” said – Delhi-based trade analyst S. Chandrasekaran. This could be due to “ground-level” problems, which could be non-availability of dollars. he said.
Iraq is becoming 4th largest importer of rice
As per the USDA, Iraq is about to become the fourth largest global rice importer and has faced multiple issues hampering the grain’s production, mainly due to water scarcity. “Therefore, imports have risen to help meet domestic demand,” the USDA said. Mr. Ronnarong Phoolpipat said that Iraq was the largest importer of Thai rice, buying 1.6 Million tonnes in 2022. 458% higher than the previous year.
The US is entering again in Iraq market
The US has exported 88k tonnes of rice to Iraq. The USDA said Iraq has signed a memorandum of understanding with the US for 2022-2023 that calls for Iraq to purchase up to two lakh tonnes of US rice. Another 44k of rice were shipped to Tehran in May, the agency said. Till now 11% import share is done by the US.
On the other hand, Chandrasekaran said the US, which had exited the rice market a few years ago, has begun efforts to re-enter the global market. “US re-entry and plans to expand its rice market reach are warning signs for India and other Asian countries,” he said, adding that Washington is striking deals with smaller nations.
AIREA’s Vinof Kaul opinion
“It is not as if only Thailand is gaining. India’s export of Basmati rice to Iraq is also increasing. Probably, Iraq is buying more from Thailand due to a shortage of currency,” said Vinod Kaul, Executive Director, All-India Rice Exporters Association (AIREA).
Vinod Kaul further added, Iraq imported 57,000 tonnes of Basmati rice from India in April compared with 35,000 tonnes a year ago. “Exports to Iraq were lower last fiscal when they dropped to 3.64 million tonnes against 4.86 million tonnes in 2021-22,” he said.
“There is no cause for concern over the developments in the Iraqi rice market. Not every consumer can afford Basmati rice and people will look to consume it as per their affordability,” Kaul’s Opinion.