CHANDIGARH – Basmati exports from the country fell to the lowest in five years during the first six months of the current fiscal, giving a major jolt to the traders and farmers of Punjab and Haryana. A significant drop in volume to Iran, which constitutes over 30% of the total exports, and stringent norms on pesticides’ residue by the European Union are said to be the main reasons for the decline.
According to Agricultural and Processed Foods Exports Development Authority (APEDA) data, the basmati exports to different countries during April- September 2019 was 18.71 lakh tonnes compared to 20.82 lakh tonnes during the corresponding period last year. Basmati exports were lowest in 2014-15 when India had exported 16.41 lakh tonnes during the same period.
“Basmati exporters are facing issues in getting payments of over Rs 1,100 crore from Iran which is pending for the past six months due to sanctions. New consignments are not being sent and it has also resulted in drop in volume,” said NR Gupta, president, All India Rice Exporters’ Association.
Iran is a big market for Indian basmati. Last year, the total exports to Iran were 34% of the total basmati exported from the country. According to Gupta, the volume to Iran in the first six months of the current fiscal nearly halved as compared to the corresponding period last year.
In addition to this, the recent European guidelines mandating exporters to obtain a certificate of inspection from a government agency to ship basmati to countries of the European Union has also cast shadow over exports.
“A recent notification stating that exports of basmati to European Union (EU) countries will require certificate of inspection from the Export Inspection Council or Export Inspection Agency with immediate effect has also impacted exports,” said Vijay Setia, an exporter.
Punjab and Haryana account for over 70-75% of basmati exports from the country and are major cash crops for farmers. Other major basmati-growing states include western UP, Uttarakhand, J&K, Himachal and Delhi which contribute 25-30% of the total exports.
Driven by higher remuneration and bumper exports last year, the area under basmati has gone up by 36% in the current season across the country. According to Basmati Crop Survey Report submitted by National Collateral Management Service Ltd, in the current year (2019-20), the total area touched 20.16 lakh hectares compared to 14.80 lakh hectares last year.
The drop in volume and increase in production has also hit the realisation of farmers and traders. The average realisation to the farmers was anywhere between Rs 2,300 and Rs 2,700 per quintal this year compared to Rs 3,300-3,600 last year. Further, according to Gupta, the average realisation to exporters is around $900 per tonne while last year it was around $1,200 per tonne.
