Iran, the All India Rice Exporters Association (AIREA) has extended an
invitation to Iranian organisations to ascertain for themselves that
rice exports to thier country are not contaminated by heavy metals as
reported in sections of the Iranian press.
A high-level Iranian delegation is expected here soon to inspect for
themselves following the Iranian Parliament's demand for a probe earlier
this week following an unofficial ban on Indian Basmati imports. The
import of Basmati rice from India was held up in ports in Iran following
a report by Iran's Standard Institute of Industrial Research laboratory
certifying that Indian rice contained traces of toxic chemicals.
Pusa 1121 variety of Basmati forms a bulk of the rice exports to Iran
and is a high foreign exchange earner for the country, selling as it
does at an average $1350-1400/tonne. Although the Iranian government has
not broached this subject with the AIREA as yet, there is apprehension
that the controversy could pressure down prices in the start of the new
paddy marketing season which has just begun. India is the biggest rice
exporter to Iran, clocking an average 7-8 lakh tonnes of Pusa 1121
variety in exports last year out of a total of around 1.5 million tonnes
in exports.
Exports have been growing at an impressive pace of 50-60% annually,
making it that much more important for AIREA to keep the governmetn and
the APEDA informed informed. Interestingly, Iran had a good paddy
harvest this year, apparently making that government jittery about lower
farmer prices if Indian Basmati swept the market. But the local rice is
far more expensive than Pusa 1121, making it highly popular. AIREA
members contended "Their best rice is unparalled in quality and the 1121
is no competition." Domsiah is high quality aromatic Iranian variety of
rice and sells at a whopping Rs 200-250/kg.
"We are ready to export rice consistent with Iranian laws and have been
doing so in compliance with it," Tilda Riceland official T S Seshadri
told the media, pointing out that it was possible that "some local
brands" whose origins were not ascertained were being passed off as
Indian Basmati and perhaps contained traces of heavy metal. According to
another prominent member (Kohinoor Brand) Gurnam Arora maintained that
no shipments were held up anymore at Iranian ports on account of heavy
metal traces anymore. As of today, no exports have been officially
banned to Iran by that government, they maintained.
Whether the festering issue has negatively impacted on export prices
this season will only be apparent a little later. Expectations are that
given the higher price of Iranian rice, Pusa 1121 prices will not dip
once the issue is "sorted out." However, sector monitors point out that
the possibility that the ongoing controversy over Pusa 1121 could work
advantageously to exporters from here in the start of the new marketing
season by pressuring down buying price to farmers in Punjab and Haryana,
who have planted excessively more Basmati this season.. The 1121
variety, which was purchased by traders last year at an average price of
Rs 3,000 per quintal, is at present selling at Rs 2,200 per quintal.
This is expected to go down to Rs 1,600 to Rs 1,800 per quintal once
fresh stocks start arriving`, according to traders.
Compared to last year, the AIREA estimates that Pusa 1121 alone could
account for some 13 lakh (1.3 million) tonnes in exports this year,
boosting overall Basmati exports to around 2.5 million tonnes. Of this,
Iran is expected to account for 50% or one million tonnes. In 2007-08,
the price of Pusa 1121 was highly volatile (ranging between
$1200-$800-$1600 per tonne) on account of uncertainty over the Iranian
paddy harvest. Last year, though, it settled down to an average
$1350/tonne (fob/c&f)..
Meanwhile, former AIREA president Vijay Setia was quoted in one of the
news reports as saying that the internationally renowned SGS laboratory,
which had also been given rice samples for testing by the APEDA, was
also likely to make its report public in a day or two.
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