Civil unrest in Iran hits India’s basmati rice exports, domestic prices fall

Civil unrest in Iran has started impacting Indias basmati rice exports to the country leading to a sharp fall in domestic prices as exporters face payment delays and mounting uncertainties an industry body said on TuesdayThe Indian Rice Exporters Federation IREF urged exporters to reassess risks on Iranian contracts and adopt secured payment mechanisms warning against overleveraging inventories meant for the Iranian marketIndia exported USD 46810 million worth of basmati rice to Iran during AprilNovember of 202526 fiscal totalling 599 lakh tonnes trade data showedIran is Indias top basmati rice export destination but the current financial year has seen growing stress on order flows payment cycles and shipment schedules due to the prevailing instabilityThe impact is now clearly visible in domestic mandis Over the past week alone prices of key basmati varieties have registered a steep decline reflecting buyer hesitation delayed contracts and heightened risk perception among exporters The domestic price of basmati rice variety 1121 has come down to Rs 80 per kg from Rs 85 per kg last week while varieties 1509 and 1718 declined to Rs 65 per kg from Rs 70 per kgIran has historically been a pillar market for Indian basmati However the current internal turmoil has disrupted trade channels slowed payments and dented buyer confidence IREF National President Prem Garg said in a statement He said exporters must exercise heightened caution particularly with respect to credit exposure and shipment timelines Importers have conveyed their inability to honour existing commitments and remit payments to India creating uncertainty for exporters the federation saidIREF has issued an advisory and appealed to stakeholders to diversify into alternative markets across West Asia Africa and Europe to cushion any prolonged slowdown in Iranbound shipments We are not sounding an alarm but urging prudence In periods of geopolitical and internal instability trade is often the first casualty A calibrated approach is essential to protect both exporters and farmers Garg notedUS tariff concernsThe federation also addressed concerns over the recent remarks by US President Donald Trump indicating that countries continuing trade with Iran may face a 25 per cent tariff IREF clarified that Indian rice exports to the US are already subject to a 50 per cent tariff up from 10 per cent earlierDespite this Indian rice exports to the US have remained resilient India exported 240518 tonnes of Basmati and nonBasmati rice to the US during AprilNovember 202526 compared to 235554 tonnes in the entire 202425 fiscal The US is the 10th largest market for Indian rice globally and the fourth largest for Basmat riceThere is limited clarity on whether the proposed 25 per cent tariff would be levied over and above the existing 50 per cent duty the federation noted adding that it does not foresee a significant decline in exports even if tariffs rise further given the unique position of Indian Basmati in global marketsHowever IREF expressed greater concern over developments in Iran where disruptions in local markets have affected trade settlements Importers have conveyed their inability to honour commitments and remit payments to India creating heightened uncertainty While similar crises have occurred in the past the trajectory of the current situation remains unclear and is expected to cause further disturbances in prices liquidity and trade sentiment in the weeks ahead the federation addedThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever