The corona virus broke out in Iran, exporting Indian basmati rice

This West Asian country is one of India's largest export markets for basmati rice. Starting the 2019-20 crop with expectations of high rice production, reaching more than 117 million tons plus weak export prospects, Indian rice exporters are suffering big losses. The crop year 2019/20 rice production is 9.67 million tons higher than the 5-year average, at 107.8 million tons.

Exports experienced double annual growth of nearly 14% per year between 2010 and 2019, severely damaged by negative geopolitical issues, tight trade rules, and the government increased the minimum purchase price. (MSP). Unfavorable market movements are leading to a fall in the price of basmati rice. On the ICEX Commodity Exchange, basmati pusa rice traded at Rs 3,030 a quintal, down due to the spread of the corona virus. However, the price of rice in the spot market also continuously decreased.

After the outbreak of the disease, Iran halted orders for Indian basmati rice, leading to a decrease of $ 18-20 in basmati rice compared to the same period in 2019. Iran and the rest of western Asia account for a large proportion. Most of the structure is basmati rice, accounting for over 30% of the total turnover.

Kohinoor Foods CEO, Gurnam Arora, said: “The corona virus is the biggest concern for exporters and with the current situation in Iran, the situation is only getting worse. The impact of the disease outbreak has begun to manifest in international trade and tourism. ”

He added that exporters are adopting a strategy of waiting and observing the situation in the next 4-6 weeks. At the same time, Mumbai-based rice trader Devendra Vora was pessimistic about the short-term industry outlook, saying there were no positive signs. “The market continues to weaken for many reasons and we can only hope the situation will improve in the next 1-2 months,” he said. Earlier, he recommended that the government promote agricultural exports to Brazil – a major consumer of rice and wheat, to alleviate difficulties for Indian exporters.

Rice exports, especially basmati rice to Iran, reached US $ 1.5 billion in fiscal year 2018/19. According to a report by US-based financial trading firm Drip Capital, rice exports fell on the global market, with the decline concentrated in West Asia due to geopolitical tensions. India is currently the largest rice exporter in the world, accounting for 25% of the global market but rice contributes only 2% of the country's total export turnover.

According to Business Standard