An official from LT Food, a leading exporter of Basmati rice, told FE that many Basmati rice shipments from India were stopped at US ports in the last few years because of 'lack of clarity' on acceptable limits for the presence of tricyclazole, a fungicide.
Tricyclazole is a pesticide used by Indian farmers to control sheath and leaf blast. It is not registered in the US and does not have an import tolerance norm, the official said.
In the absence of registration, the US authorities rejected the rice consignments, resulting in disruption of shipments of Basmati from India.
US-based Dow AgroSciences, which is a developer of the molecule and holder of all relevant safety data, had in September 2012, at the instance of Indian rice exporters, applied to the US Environmental Protection Agency to establish an import tolerance of 3 parts per million.
However, the US agency will be able to decide on import tolerance only by July this year. We will talk about expediting the decision on import tolerance so that exports are not hampered, a leading Basmati rice exporter said.
Rice exporters will also urge the US authorities to follow a time-bound plan for establishing tolerance levels of other pesticides of concern, instead of taking a case-by-case approach.
Commerce ministry officials say that volume-wise, India exports about one lakh tonne of Basmati rice annually to the US from total annual shipments of more than 3 million tonne to mostly West Asian countries such as Iran, Saudi Arabia and UAE. But value-wise, realisation from shipments to the US is more than $200 per tonne as compared to exports to other countries. This fiscal, average price realisation from Basmati rice exports will be around $1100-$1200 per tonne, a commerce ministry official said.
As tricyclazole has not been registered in the US, almost half of Basmati rice consignments did not make it to the US market last year, a commerce ministry official admitted.
The country earned more than Rs 20,649 crore between April and December last year from Basmati rice shipments an increase of more than 58% compared to the last fiscal. In terms of US dollar earnings, the exports grew by more than 46%.