India is the leading grower and exporter of basmati rice to the global market. (Representational)
In a grain market of Uttar Pradesh's Ghaziabad, the price of the Paddy (Dhan) Basmati 1509 rice variety has decreased by Rs 200 to Rs 300 per quintal in the last two days because the exporters are no longer coming in with big orders. The reason for the slump in exports is due to the ongoing conflict between Iran and Israel.
The price of Paddy (Dhan) Basmati 1509 variety has fallen to Rs 2700 per quintal in the last two days. Last year, the price of a good quality of 1509 (Dhan) Basmati had reached upto Rs 3500 per quintal. This too has worried basmati rice farmers as the big exporters and millers have reduced the quantum of this variety they earlier used to buy in the grain markets.
About 25 per cent of basmati rice exported from India is sent to Iran, which is being badly affected due to the uncertainty.
All India Rice Exporters Association General Secretary Ajay Bhalotia said the Israel-Iran conflict has the "basmati rice industry in jeopardy".
"Of the total basmati rice exported from India, 25 percent is exported to Iran while 20 percent goes to Iraq. The combined value for these countries is more than two million tonnes whose value is more than two billion dollars. If this export is not done, then the farmers' profit in the fields will be reduced to half," he said.
Mr Bhalotia also claimed that insurance companies have "stopped giving insurance on exports to Iran". "The possibilities of export to Iran have been closed due to this," he said.
"We request the government to ask the insurance companies to give us insurance so that we can do some amount of exports to Iran and Iraq and provide fair prices to the farmers for their produce," he added.
Just last month, India removed the floor price for basmati rice exports to spur orders from the Middle East, Europe, and the Americas.
The minimum export price or MEP posed a barrier to exporting certain basmati rice grades, and its removal opened up opportunities for global buyers to access the full range of options, said top basmati rice exporters.
India is the leading grower and exporter of basmati rice to the global market, followed by neighbouring Pakistan.
The Iran-Israel Conflict
The conflict between Iran and Israel escalated after the latter killed Hezbollah chief Hassan Nasrallah, in an airstrike last week that flattened a Beirut neighbourhood.
Iran fired a salvo of missiles at Israel on Tuesday in what it said was a response to Israel's repeated targeting of Iranian interests in the region.
The missiles were followed by a sermon of Iran's Supreme Leader Ayatollah Ali Khamenei when told a huge crowd in Tehran that Iran and its regional allies would not back down.