Basmati exports losing aroma as Iran goes high on curbs

Written by Sandip Das | New Delhi | Updated: May 1 2014, 06:16am hrs
BasmatiBasmati rice exports accounted for 70% of India?s total rice exports in FY14, at Rs 28,187 crore. Reuters
Iran, the principal driver of Indias rice exports due to its populations preference for the aromatic, long-grained basmati variety, has turned protectionist and clamped curbs on the import of the grain from India.

With Tehran insisting that Indian exporters of basmati must get stamps of quality approval from a multiplicity of designated global agencies, the countrys basmati exports have slumped sharply since January 2014.

Indias basmati exports to Iran, which in FY14 accounted for 40% of the its total exports of the speciality grain, dropped from 1.3 lakh tonne in January 2014 to 89,387 tonnes in February and further to 55,210 tonnes in March, as per data furnished by the All India Rice Exporters Association (AIREA).

Basmati rice exports accounted for 70% of Indias total rice exports in FY14, at R28,187 crore.

Sources in the commerce ministry told FE Iranian authorities have been asking Indias exporters since January 2014 to furnish a series of documents on the good agricultural practices (GAP), ISO 22000, which deals with food safety management and packaging protocols, besides the non-genetically modified crop certification. Iran, the sources added, has also revised the accepted level of arsenic in basmati rice from 150 ppm (parts per million) to 120 ppm and asked Indian exporters to put a tag on each pack of consignment for ensuring traceability in case aresenic content is found more than the specified limit.

We do not have any issue in meeting new Iranian

regulations, but getting certification for multiple agencies is time consuming. This has slowed down exports in the last few months, said an official in the commerce ministry.

Vijay Setia, former president of AIREA and a leading exporter of the basmati variety, said shipments to Iran were likely to decline marginally in the current year. We are taking measures to reduce the arsenic content in our rice by educating farmers besides educating exporters about maintaining stringent quality norms, he said.

Meanwhile, the commerce ministry is learnt to have asked Iran to send a team of experts to inspect rice procurement and processing facilities in the country. The ministry expects this will help allay Irans apprehensions over the quality of Indian rice.

Iran is a key market for us, we want a single-window clearance for all the export shipments, a Basmati rice exporter said. The last seven years have marked a watershed in Indias exports of basmati rice. From a modest Rs 2,792 crore in 2006-07, the exports have increased manifold since.

Apart from Iran, other key destinations for the Indian basmati rice are Saudi Arabia, the UAE, Kuwait and Iraq. Non-basmati rice is exported mainly to African countries, including Benin, Nigeria, South Africa and Senegal.

India had launched a rupee settlement mechanism from April 2012 with Iran to avoid sanctions from the US and the European Union. As part of this initiative, state-owned UCO Bank has tied up with four Iranian lenders Parsian, Pasargad, Saman and EN Banks for settlements of dues.