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By Rajendra Jadhav
MUMBAI (Reuters) – India’s basmati rice exports will fall in 2024 after hitting a record high last year, as rival Pakistan offers the grain at competitive costs amid a rebound in production, industry officials said.
India and Pakistan are the leading exporters of premium long-grain rice, known for its aroma, to countries such as Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates and the United States.
India’s basmati rice exports rose 11. 5% year-on-year to 4. 9 million tonnes in 2023, just below the record of five million tonnes set in 2020, due to dwindling materials from Pakistan and storage efforts through countries carrying them, industry officials said.
Shipments of Basmati rice helped the world’s largest rice exporter raise a record $5. 4 billion in 2023, up about 21% from a year earlier, due to higher prices, according to government data.
“Last year, buyers were struggling to take inventory because Pakistan was facing production problems. This year, however, Pakistan is offering lower costs than India due to higher production,” said Vijay Setia, a primary exporter in India’s Haryana state.
Islamabad’s total rice exports could rise to five million tonnes in the 2023/24 monetary year, up from 3. 7 million tonnes last year, Chela Ram Kewlani, chairman of the Pakistan Rice Exporters Association (REAP), said last month.
The depreciation of the Pakistani rupee has made Pakistani exports more competitive, according to Akshay Gupta, head of bulk exports at KRBL Ltd.
At the same time, the decline in export demand amid an estimated 10% increase in basmati rice production in India has to reduce basmati rice costs in that country, Gupta said.
Iran, India’s biggest basmati rice customer, cut purchases by 36% in 2023, but larger shipments to Iraq, Oman, Qatar and Saudi Arabia made up for the shortfall, according to data compiled through India’s Ministry of Commerce and Industry.
India’s exports had lost momentum in September and October when the government imposed a minimum export value (MEP) on basmati rice, but temporarily recovered, a New Delhi-based exporter said.
In August, India imposed MEP on basmati rice shipments at $1,200 per tonne, exceeding market prices, before reducing it to $950 in October.
However, exports began to weaken in January and may decline further in the near term as buyers delay purchases due to emerging shipping prices caused by transportation disruptions in the Red Sea, exporter Vijay Setia said.
“Buyers have enough inventory; They don’t want to rush,” he said.
(Reporting via Rajendra Jadhav; editing via Leslie Adler)