Iran puts cap on import price of Indian basmati

By | February 18, 2017

Giving a jolt to Indian rice exports, Iran, a major buyer of the Indian basmati, has reportedly imposed a price cap on the import of Indian basmati. It has fixed a price of $850 per tonne while earlier it had an open market due to which price benefits were coming to the Indian rice industry.
Terming it an unfortunate decision, Indian rice exporters have decided to focus on other markets, including Saudi Arabia, Iraq, Europe, Dubai, Afghanistan, Yemen and others, where they already export a huge chunk of rice.
The rice exporters also requested the Iranian government to reconsider its decision as the basmati is not a commodity of common people and is consumed by the rich people.
As per exporters, Iran imports around 20-25% of Indian basmati, but this decision will definitely reduce the export of Indian rice in Iran as with this price cap it would not be economically viable to export the commodity.
“It is unfortunate and unfriendly decision by the Iranian government and it will not be beneficial to Iranian trade and industry,” said Vijay Setia, former president, All India Rice Exporters’ Association (AIREA).
“We have an open market across the world and it is for the first time that any country has put a price cap on Indian basmati,” he said.
Gurnam Arora, joint MD, Kohinoor Foods Ltd., and founder president of the AIREA, said, “We are not only dependent on Iran to export our rice and this year we already have a shortage of around 20-30% of basmati. So, we don’t have much rice to export to Iran under such circumstances.”
Satish Goel, executive member, AIREA, said, “Business always depends on demand and supply. The cap on price cannot deter the demand of Indian rice. On this price we will not export it and the Iran government has to take the decision back.”
“We have a vast market in the world and will shift our exports to other countries,” he said.