The government’s recent decision to ban rice imports from India could result in a shortage of the staple grain in the domestic market, says Salar Saket, the deputy head of Rice Importers Association of Iran.
“Officials have told us that imbalance in bilateral trade is the reason behind this measure. Even if that is the case, financial restrictions caused by sanctions, as well as the fact that shipping lines do not support new routes, replacing other countries [with India] is impossible in the short run,” Saket was quoted as saying by IRNA.
According to the official, the ban had to be imposed before the domestic harvest season and the beginning of foreign purchases.
“Indian rice accounts for the highest proportion of imported rice due to its high quality and reasonable price. Iranians prefer Indian rice over other types of foreign rice and importers trade commodities for which there is demand in the Indian market. The rice we purchase from India meets the needs of six underprivileged income deciles and also balances the price of Iranian rice. So, it is obvious that this ban on imports can harm the market,” he said.
The ban, which was put into effect around a month ago, also applies to tea import from India.
“It will be lifted as soon as bilateral trade is balanced or registers surplus,” secretary of Iran’s Rice Suppliers Commission, Masih Keshavarz, had said earlier.
Latest data released by the Ministry of Commerce and Industry of India confirm that Iran has registered a trade deficit with India.
Bilateral trade stood at $2.09 billion during the first 10 months of 2022.
Iran’s export to India hit $550 million during the period, registering a 59.06% rise compared with the corresponding period of last year.
The exported goods mainly included petroleum products worth $144 million, dye intermediates worth $133 million, fresh fruits worth $117 million and organic chemicals worth $39 million.
Iran’s imports from India during the period stood at $1.58 billion, registering a year-on-year rise of 57.59%.
The imports mainly included rice worth $953 million, tea worth $73 million, sugar worth $65 million, other types of rice worth $60 million and fresh fruits, bulk drugs and drug intermediates each worth $40 million.
Bilateral trade hit $1.69 billion in 2021, with Iran’s export standing at $409 million and imports at $1.28 billion.
1.3m Tons of Rice Imported in 8 Months
Around 1.3 million tons of rice were imported during the first eight months of the current Iranian year (March 21-Nov. 21), according to the head of Rice Importers Association.
“We still need to import 300,000 tons more to ensure an adequate supply of the staple grain to the market in the runup to the New Year holidays [in March],” Karim Akhavan Akbari was quoted as saying by IRIB News.
A total of 1.75 million tons of rice were imported into Iran during the last Iranian year (March 2021-22), which set a 10-year record, according to the secretary of Iran Rice Association.
“Last year’s imports were more than twice the volume the country needed to compensate the domestic production deficiency,” Jamil Alizadeh Shayeq was also quoted as saying by Mehr News Agency.
A total of 2.25 million tons of rice were produced in Iran during the last Iranian year (March 2021-22), according to the deputy head of Iran Rice Union, Ahmad Eshraqi.
More than $1 billion worth of rice were imported during the first five months of the current Iranian year (March 21-Aug. 22), data released by the Islamic Republic of Iran Customs Administration show.
India was the biggest exporter with $583 million worth of exports followed by Pakistan with $350 million, Thailand with $79 million and the UAE with $60 million.
According to IRICA, $21.63 million worth of rice were imported to Iran’s free trade zones during the period.
Rice consumption in Iran currently stands at 3 million tons per year, about 70% of which are supplied through domestic production, according to Alireza Mohajer, a deputy agriculture minister.
India has long been a major exporter of rice to Iran. Other exporters include Pakistan, the UAE, Thailand, Turkey and Iraq.
The three northern provinces of Gilan, Mazandaran and Golestan are Iran’s rice production hubs.
FAO Forecast
The Food and Agriculture Organization of the United Nations expects Iran’s rice production to reach 3 million tons in 2022, down from 3.1 million tons last year. Five-year average output has been put at 3.5 million tons.
In its biannual report on global food markets, FAO said Iran imported an average of 1.3 million tons of rice during the 2018-20 period.
The 2018-20 average production has been put at 2.5 million tons.
Consumption is forecast to slightly increase from 3.6 million tons in 2021 to 3.7 million tons in 2022.
Average utilization during the crop years 2018-19 to 2020-21 stood at 3.6 million tons.
Average closing stocks in 2022-23, 2021-22, and 2018-19 to 2020-21 have been put at 0.6, 0.5 and 0.7 million tons respectively.
The 2018-21 average per capita has been put at 38.2 kilograms.
Limited availability of water for irrigation cloud rice production outlook for Iran, the report said.
“International trade in rice is predicted to register its third successive annual increase in 2022, with volumes exchanged across the world forecast to reach 53.1 million tons, up 3% from the all-time high of 2021. With the exception of the Asian Far East, most regions are anticipated to step up their imports over the course of the year, often aided by state efforts to contain inflationary pressure. Such steps have taken the form of import duty remissions in various African and Latin American countries, or of an acceleration of government-contracted imports, as has been most notably the case of Iraq and the Islamic Republic of Iran,” the report concluded.
