Seasonal Ban on Rice Imports to Be Lifted on Sunday

The Ministry of Agriculture has allowed rice importers to register orders from Jan. 21 until June 21.

The permission was communicated by Agriculture Minister Mahmoud Hojjati in a letter to Minister of Industries, Mining and Trade Mohammad Shariatmadari, IRNA reported on Friday.

According to the letter, the order registrations will be valid for a three-month period and are extendable by a further one month.

Hojjati noted that any rice shipments as per the new orders need to be cleared through Iranian customs by July 22, after which all imports will be banned.

Every year and during the rice harvest season, the government bans rice imports in support of local farmers and domestic production.

Iranians consume 3.2 million tons of rice a year while domestic production stands at 2.2 million tons.

Basmati rice prices are seen rising in the international market with Iran likely to begin import of the cereal soon, Indian newspaper The Economic Times reported on its website.

Rice exporters, who are already getting 20% higher price for basmati compared with last year, said Iran could start import as early as next week.

“The announcement by Iran is expected soon as the trade was opened by this time last year,” said Vijay Setia, president of All-India Rice Exporters Association. “The delay is due to the extended domestic rice season in Iran.”

India exports about 4 million tons of basmati rice every year to more than 100 countries, of which Saudi Arabia, Iran, the UAE, Kuwait, the US and the UK are the main buyers.

The revival in price of basmati in the international market follows a lean cropping season in India. Farmers had shrunk the area under basmati due to a fall in the domestic price of the commodity.

Usually, demand and price of basmati increase around this time of the year, when Iran starts importing the commodity after the close of its domestic rice season.

Last year, Iran had announced the import of basmati in the second week of January. This time the announcement is coming at a time when international basmati prices are already strong.

“We are expecting a formal announcement by Iran on January 22 on permission for import of basmati,” AIREA Executive Director Rajen Sudershan told the Indian daily, adding that in the international market, basmati is available for $900-1,150 a ton—15-20% higher than a year ago.

This year, basmati prices are firm mainly due to lower harvest in India and higher cost of raw paddy in states like Punjab and Haryana.

Setia said basmati output this season is lower by 10%.

According to exporters, the spike in basmati price is also in part due to the rise in crude oil price, which has strengthened the Persian Gulf economies.

Ashok Sethi, former president of Punjab Rice Millers and Exporters Association, said international basmati prices are being indirectly buttressed by increase in crude oil prices.

Basmati prices were subdued in the previous two years.

“A lower harvest may not affect the volumes in the export market,” said AK Gupta, director of Basmati Export Development Foundation, an arm of Agricultural & Processed Foods Export Development Authority.

“Basmati exports could witness slight rise this year due to steady global demand and higher carryover stock from the previous season,” Gupta said.