One million tons of rice were imported into Iran from the beginning of the current Iranian year (March 21, 2021) to February 20, 2022, according to director general of Sales and Distribution Coordination Department of the Government Trading Corporation.
Hojjat Baratali was also quoted as saying by Mehr News Agency that GTC initially expected around 2 million tons of rice to be produced domestically this year, but the figure did not exceed 1.85 million tons due to the drought.
GTC, affiliated with the Agriculture Ministry, is the lever for enforcing market controls and in charge of maintaining the supply of wheat, rice, cooking oil, sugar and meat for the country’s strategic reserve of essential goods.
“As domestic demand for this staple grain stands at 3.2 million tons per year, we need to import between 1.35 million tons and 1.4 million tons to be able to meet the local demand,” Baratali said.
According to Masih Keshavarz, secretary of Rice Importers Union, last year, a total of 875,000 tons of rice were imported.
Rising Prices
Keshavarz noted that although global rice prices, particularly in Pakistan and India, are relatively stable, prices in Iran’s market have been on the rise. He blamed this on public bodies that do not cooperate in coordinating import procedures, especially the Islamic Republic of Iran Customs Administration and the Institute of Standards and Industrial Research of Iran.
Latest data released by the Statistical Center of Iran show rice prices nearly doubled (95% rise) in the month to Feb. 19 compared with the corresponding period of last year.
According to the report, first-grade Iranian rice went for 673,004 rials ($2.5) per kg during the month under review, registering an 18.2% rise compared to the previous month.
Rice prices have been quoted at much higher rates of up to 1 million rials per kilo ($3.8) in recent days.
Bought Impact
Touching upon the issue of drought and its effect on the rice market, Faramak Aziz-Karimi, the Agriculture Ministry’s director general of Grains and Essential Goods Department, told IRNA that the fall in production results from water shortage and unfavorable weather experienced so far this year.
“Rice, being a water-intensive crop, is highly dependent on precipitation and other water resources. This year has been relatively dry and production has decreased, yet we began the year with 660,000 tons of reserves from last year. So hopefully, there will be no trouble in meeting the domestic demand,” he said.
The official added that a total of 2.6 million tons rice were produced last year (2020-21) from more than 800,000 hectares of paddy fields across the country, registering a 10.34% decline compared with the output of the year before.
“Over 73% of the country’s rice cultivation took place in the three northern provinces of Gilan [32%], Mazandaran [26%] and Golestan [15%], and 18% in the southern province of Khuzestan, adding that the staple grain was cultivated in 15 other provinces as well, which together accounted for some 8% of the annual harvest,” he was quoted as saying by IRNA.
According to Aziz-Karimi, currently 654,000 hectares of paddy fields are scattered across the country, 440,000 hectares of which are located in the three northern provinces previously mentioned.
Drought has inflicted over 670 trillion rials ($2.5 billion) in losses on Iran’s agriculture sector since the beginning of the current crop year, Mohammad Mousavi, an official with the Agriculture Ministry, said in June last year. Assessments carried out over 11.2 million hectares of farmlands in 30 provinces show 43% of the total losses pertained to the decline in production of agronomic crops, 26% to horticultural products, 13% to fisheries and livestock, and 11% to forage crops.
“In addition, 4% of the total damage are to blame on challenges created in water transportation infrastructures, pools, pipes, aqueducts and springs, and 3% of losses can be attributed to water supply complications and the animal feed used by nomads,” he was quoted as saying by Mehr News Agency.
Indian Exports Hit Record Low as Iran Trims Buying
Iran is the fourth largest importer of rice in the world, chiefly from India, according to a report by Iran Chamber of Commerce, Industries, Mines and Agriculture. Imports also come from Pakistan and Thailand.
India's basmati rice exports plunged by a fifth from a year ago to the lowest level in four years in 2021, as top buyer Iran slashed purchases after its rupee reserves dwindled, Reuters reported recently, citing government and industry officials.
The country's basmati rice exports in 2021 fell by 20% from a year ago to 4 million tons, the lowest since 2017, according to government data.
Shipments to Iran, the biggest buyer of India's basmati rice, plunged by 26% from a year ago to 834,458 tons, the data showed.
"Iran wasn't active in the market for a few months last year after its rupee reserves with Indian banks depleted," said a Mumbai-based dealer with a global trading house.
Iran previously had a deal to sell oil to India in exchange for rupees, which it used to import critical goods, including agricultural commodities, but New Delhi stopped buying Tehran's oil in May 2019 after a US sanctions waiver expired, Reuters reported.
Tehran continued using its rupees to buy goods from India, but without crude sales, which brought down Iran's rupee reserves.
“There was slowdown in exports in the middle of 2021 but in the last two-three months buying from Iran, Saudi Arabia and other key buyers have picked up,” said Vijay Setia, former president of All India Rice Exporters Association.
India, the world's biggest rice exporter, mainly exports non-basmati rice to African countries and premier basmati rice to the Middle East.
The country’s total rice exports jumped nearly 46% in 2021 from a year ago to a record 21.42 million tons as Bangladesh, China and Vietnam increased purchases.
“Basmati rice production in 2021 fell around 15% from a year ago because of lower area and untimely rainfall during harvesting season,” Setia said.
"Export prices of basmati rice have gone up by 20% because of lower production, but still demand is robust for February and March shipments."
