MUMBAI: India’s basmati rice exports plunged a fifth from a year ago to the lowest level in four years in 2021 as top buyer Iran slashed purchases after its rupee reserves dwindled, government and industry officials said.
The country’s basmati rice exports in 2021 fell 20% from a year ago to 4 million tonnes, the lowest since 2017, according to government data.
Shipments to Iran, the biggest buyer of India’s basmati rice, plunged 26% from a year ago to 834,458 tonnes, the data showed.
“Iran wasn’t active in the market for a few months last year after its rupee reserves with Indian banks depleted,” said a Mumbai-based dealer with a global trading house.
Iran previously had a deal to sell oil to India in exchange for rupees, which it used to import critical goods, including agricultural commodities, but New Delhi stopped buying Tehran’s oil in May 2019 after a U.S. sanctions waiver expired.
Tehran continued using its rupees to buy goods from India, but without crude sales, which brought down Iran’s rupee reserves.
There was slowdown in exports in the middle of 2021 but in the last two-three months buying from Iran, Saudi Arabia and other key buyers have picked up, said Vijay Setia, former president, All India Rice Exporters Association (AIREA).
India, the world’s biggest rice exporter, mainly exports non-basmati rice to African countries and premier basmati rice to the Middle East.
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