A total of 178,251 tons of rice worth $212.56 million were imported to Iran during the first two months of the current Iranian year (March 21-May 21), registering a 50% and 60% fall in terms of weight and value respectively, according to the Islamic Republic of Iran Customs Administration.
The imports stood at 350,360 tons worth $534.6 million in the corresponding period of last year.
Rice shipments during the period mainly came from India with 89,000 tons worth $101 million, Pakistan with 73,000 tons worth $92 million, the UAE with 10,000 tons worth $12 million and Taiwan with 1,000 tons worth $1 million, Fars News Agency reported.
A total of 1.77 million tons of rice worth $2.13 billion were imported to Iran from five countries in the last Iranian year (ended March 20, 2023), registering a 101% and 194% rise in terms of weight and value respectively compared with the year before, according to IRICA.
The imports stood at 885,000 tons worth $726 million in 2021-22.
The UAE, Pakistan, Thailand, Turkey and India were the top five exporters of rice to Iran during the year that ended on March 20, 2023.
India exported 885,000 tons worth $1.16 billion to top the list of rice exporters to Iran during the period and accounted for 54.34% of Iran’s total rice imports, IRIB News reported.
It was followed by Pakistan accounting for 33.78% of total imports with 628,000 tons worth $721 million.
The UAE, Thailand and Turkey came next, respectively.
According to Masih Keshavarz, secretary of Iran’s Rice Suppliers Commission, the seasonal ban on rice imports was not implemented in the last Iranian year.
The ban seeks to shore up domestic production during the harvest season.
Iran is also a producer of top quality rice, but to meet domestic demand it needs to import huge volumes as the grain is a staple food product for Iranian households.
The three northern provinces of Gilan, Mazandaran and Golestan are the main rice producing regions of Iran.
India Losing Iran’s Rice Market as Rupee Reserves Deplete
India faces the possibility of losing one of its largest markets for basmati rice exports, Iran, following the depletion of rupee reserves held by the West Asian nation in recent weeks, people familiar with the matter said on Wednesday.
The issue has also hit the export of other commodities such as tea and pharmaceuticals to Iran, the people added. Iran has been paying for imports by using rupee reserves built up from oil exports to India, before New Delhi stopped buying Iranian crude in mid-2019 because of US sanctions on Tehran, Hindustan Times reported.
While the Iranian side has been working on ways to resume basmati rice imports from India, importers in Iran have begun exploring the option of increasing rice procurements from other producers such as Pakistan, Turkey and Thailand, the people said.
Iran imported almost a million tons of the aromatic rice from India in 2022-23, 20.35% of the total basmati exports of 4.5 million tons from the country.
Two persons, who spoke on condition of anonymity, said India-Iran trade has fallen sharply since 2019-20 after New Delhi stopped buying Iranian crude in May 2019. Till then, Iran was among the top three suppliers of energy to the country, along with Saudi Arabia and Iraq.
“It seems Iran has exhausted all its rupee reserves, and thereby trade in local currencies of the respective countries is not possible,” one person said.
A second person, an expert on India’s currency management, said, “As far as I know, there may not be any trade in local currencies [rupee-rial trade].”
The Iranian side flagged the issue to the Indian side in several recent meetings and offered to resume oil exports as a way to build up rupee reserves held in India, the people said. The Iranian side also pointed to India’s purchase of Russian crude in the face of Western sanctions and contended New Delhi should adopt a similar approach to resuming procurement of Iranian energy, the people added.
Iran has been either the largest or second-largest importer of Indian basmati since 2014-15, according to government data. It was the largest importer of the commodity in 2017-18, 2018-19, 2019-20 and 2021-22. Iran imported 935,567 metric tons of basmati in 2014-15, and the amount peaked in 2018-19 at 1.4 million metric tons. The figure for 2022-23 was 998,879 metric tons. Iran was the fourth largest buyer of Indian tea during 2022-23, with imports worth $68 million.
According to official data, India’s trade with Iran fell sharply in 2019-20, compared to the previous fiscal. Imports, mainly Iranian crude, fell about 90% to $1.4 billion, as compared to $13.53 billion in 2018-19.
The year-on-year fall was not that sharp (less than 5%) for India’s exports to Iran, which were worth $3.37 billion in 2019-20, compared to $3.51 billion in FY19.
India imported about 23.5 million tons of Iranian crude, almost one-tenth of its total requirement in 2018-19, on lucrative terms such as a 60-day credit and other discounts. Besides crude, India mainly imported petroleum products, dye intermediaries and fruits from Iran and primarily exported basmati rice.
Other key Indian exports included tea, sugar and pharmaceuticals.
The trade balance, in favor of Iran before May 2019, gradually shifted in favor of India after it halted crude imports. In 2022-23, India exported goods worth $1.66 billion (mainly basmati rice), but its imports from Iran were worth only $672 million.
In the first month of the current fiscal (April 2023), India exported goods worth $123 million (mainly basmati rice), marking a 1.06% year-on-year growth, but imports contracted by 7.24% to $69 million.
