Wasted opportunity: Year after Beijing lifts ban, Basmati exports yet to resume

Written by Sandip Das | New Delhi | Updated: May 21 2013, 05:58am hrs
More than a year after China gave its nod to the import of Basmati rice from India, the export of the long-grained, aromatic rice has not yet commenced. Indian exporters say that it would take a few years before India re-starts sending consignments of Basmati rice to China. However, trading sources said that a small quantity of Basmati rice destined for Hong Kong is finding its way into mainland China.

In April, 2012, Chinese authorities approved the import of Basmati rice from India with the condition that each consignment must carry a phytosanitary certificate, indicating food safety. Even Chinese officials had inspected the facilities of private rice exporters in India before giving approval to imports. China had banned imports of several Indian agricultural products, including Basmati rice, due to the presence of quarantine pests in processing and storage houses here. The approval had come after Indian rice passed through testing procedures of the Chinese official bodies.

Although Chinese prefer the fragrant sticky Jasmine rice from Thailand and Vietnam, the country has shown interest in both Basmati and non-Basmati rice from India. Exporters said that Indian companies are exploring possibilities of sending non-Basmati rice to China. We are still studying the Chinese market, an exporter said.

But many have already smelt the potential there. There is a huge potential for export of non-Basmati rice to China, All India Rice Exporters Association (AIREA) former president Vijay Setia told FE.In 2012, Pakistan exported about 5.8 lakh tonne of non-Basmati rice to China, becoming Chinas second-biggest rice supplier after Vietnam. Meanwhile, the US department of agriculture recently stated that China's rice imports this year would surge to more than 3 million tonne (mt) from 2.34 mt a year earlier.

China presents a new market for Indian rice exports, which have seen a huge surge in volumes in the last few years despite hiccups in key markets like Iran due to payment-settlement issues.

As a part of market expansion for Basmati and non-Basmati rice, India is looking at China, Mexico and the Commonwealth of Independent States (CIS). The country's share of the global market for Basmati rice is close to 60%, while Pakistan accounts for the remaining 40%.

With the rising global demand in Africa and the European Union and the sustained consumer preference in West Asian countries like Iran and Saudi Arabia, India is all set to emerge as the biggest rice exporter globally with shipment of 10 mt during 2012-13. With this, India will emerge as the top rice exporter for the second time in a row. The total earnings from India's rice exports during 2012-13 is estimated at R33,000 crore.

India has emerged as the worlds largest exporter of rice during 2011-12 with close to 10 mt of exports. Thailand exported 6.9 mt of rice, falling behind Vietnam, which sold 7.8 mt of the commodity overseas.