Breaking records: India's basmati rice exports soar in fiscal year 2024

In the fiscal year 2024, basmati rice exports have achieved remarkable growth in both volume and value. According to the latest data, shipments from April to February have surpassed $5.2 billion, with volumes exceeding 4.67 million tonnes, setting a new high.

While the exports for the entire fiscal year are projected to establish a new record once the figures for March are incorporated, concerns arise due to prevailing geopolitical tensions in the Middle East, which is a key market accounting for over 70 percent of basmati exports.

Trade sources indicate that the recent conflict between Iran and Israel in the region may pose significant challenges for Indian exporters in the new financial year. The situation is being closely monitored, as its potential impact on basmati rice exports remains uncertain. Indian exporters have already faced difficulties as a result of recent attacks in the Red Sea region, leading to increased shipping costs and transit time to destinations such as Europe and the United States.

However, analysts believe that the ongoing tensions may also result in higher exports and prices. Countries like Iran and Iraq currently possess sufficient stock to weather any geopolitical fallout, while other Gulf nations such as Saudi Arabia, Oman, Qatar, and the UAE may face shortages. This could potentially lead to a fresh surge in export orders for basmati rice, accompanied by increased prices due to additional demand and risk premium.

S. Chandrasekaran, a trade analyst and author of the book ″Basmati Rice: The Natural History and Geographical Indication,″ suggests that Iran is expected to increase its rice purchases by 30 percent in the current fiscal year. The share of basmati rice imports will depend on the Iranian government’s food policy.

During the April to February period, basmati shipments witnessed a 22 percent increase in value. Saudi Arabia, the largest buyer, imported basmati rice worth over $1.1 billion, compared to $920 million in the same period last year. In terms of volume, exports to Saudi Arabia reached 9.61 lakh tonnes, up from 8.51 lakh tonnes previously.

Iraq emerged as the second-largest buyer, with both volume and value more than doubling compared to the previous year. Iraq’s basmati rice imports from India during April to February stood at 7.02 lakh tonnes, compared to 3.13 lakh tonnes in the previous year. The value of basmati shipments to Iraq reached $757 million, compared to $321 million in the same period last year.

Iran, previously the second-largest buyer, now occupies the third position, with a decrease in value of shipments to 6.44 lakh tonnes during April to February, down from 9.27 lakh tonnes in the previous year. Basmati exports to Iran generated $652.70 million during April to February, a decline from $911.02 million during the same period last year.