Punjab’s basmati export hit by Iran sanctions hurdle

TIT-FOR-TAT Development comes after govt cut down oil imports from Middle East nation

CHANDIGARH: A delegation of basmati exporters, which returned from Iran last week, is not very optimistic about basmati exports, as the Middle East nation is expected to import just 4 lakh tonne of basmati, half the amount it has been procuring in the past.

The trend points to difficult times for Punjab’s basmati farmers who, only last season, shifted from the water-guzzling paddy to the long grain variety of rice, with an aim at high returns.

“We, too, are worried. We can only guess how much basmati Iran will buy,” said Ashok Sethi, director with basmati exporters association that engages in an annual trade of at least Rs30,000 crore export of aromatic varieties of rice.

“There is no commitment of exports from Iran but it is likely they will book some stock because of the high quality grain produced in India, particularly Punjab,” Sethi added.

Iranian ambassador to India, Dr Ali Chengeni, who was in Chandigarh last month, had said that if India does not buy oil from Iran, his country would not import basmati from Punjab. “Even now Iran maintains its stand, so we want our government to talk to them,” adds Sethi.

Of the total 40 lakh tonne basmati (worth Rs 30,000 crore) exported from India every year, 16 lakh tonne goes to Iran and Saudi Arabia, with Punjab and Haryana collectively contributing to 75% grain exported, and Punjab contributing the larger share.

In Punjab a total of 15 lakh acres is under basmati cultivation this season. The 1509 variety is sown over 40% of the area (6 lakh acres) and rest, which is the 1121 variety, is expected to ripen in November.

The 1509 variety has fetched Rs2,500 per quintal but prices are expected to fall when the 1121 variety arrives because of apprehensions of glut.

“A team of exporters from Iran will try to carve a middle path with the Indian government so traders and farmers don’t suffer. Despite the fact that oil imports have stopped, we can import dry fruit and urea from Iran so that our corpus contains the funds,” adds Sethi.

“So far the scenario is not worrisome, as the quality of our aromatic grain has improved and traders from other states are also buying basmati from Punjab,” said secretary agriculture, KS Pannu. In 2017, after the traces of insecticide tricyclazole was reported in basmati by European countries and Saudi Arabia, Punjab’s agriculture department and the exporters association ran a campaign to control the usage of insecticide and pesticide.

Pannu said he is hopeful that trade sanction over Iran will be lifted as with higher basmati export, prices too would increase manifold.

EXPORTERS DELEGATION BACK FROM IRAN; NO ASSURANCE OF ORDERS FROM THE MIDDLE EAST NATION