The import of rice has been practically banned since early November and no kind of rice can undergo customs clearance, according to the head of Rice Importers Association of Iran.

“Respective officials have cited ‘balancing out bilateral trade’ as the reason for banning rice imports from the countries we normally purchase the grain from,” Karim Akhavan-Akbari was also quoted as saying by the news portal of Iran Chamber of Commerce, Industries, Mines and Agriculture.   

His comments came after it was earlier announced that only Indian rice imports were banned...

TEHRAN- Iran has imported 1.298 million tons of rice during the first 10 months of the current Iranian calendar year (March 21, 2019-January 20, 2020), the spokesman of the Islamic Republic of Iran Customs Administration (IRICA) announced.

According to Rouhollah Latifi, so far, 1.053 million tons of the mentioned amount has been fully cleared, while the clearance licensing process is underway for another 51,000 tons. Imports of foreign rice are prohibited every year during the harvest season of domestic rice, which is from late July to late November, Latifi said, adding that since the bans on imports were lifted, the imports have been underway smoothly. The country’s rice cultivation and production have grown this year due to favorable weather conditions and imports have also been higher than the previous years, the official said. Back in October 2019, Deputy Agriculture Minister Abdolmehdi Bakhshandeh announced that Iran has become completely self-sufficient in rice production as it plans to cut up to two million tons of imports a year. The Statistical Center of Iran estimates that Iranians consume approximately 35 kilograms of rice per person each year. That would mean a domestic demand of nearly three million tons for a country of 83 million people. Bakhshandeh said rice self-sufficiency would save Iran more than $1.1 billion in imports, adding that it would also be a major success amid efforts to minimize the impacts of the American sanctions on food security in the country.

Defaults by Iranian importers on some Indian basmati rice brands under bilateral deals have hit India’s export of these products in the June quarter. The Indian government has cautioned exporters to avoid private transactions with Iranian importers, Business Standard reported. Data from the Indian government’s Agricultural and Processed Food Products Export Development Authority show shipment of basmati declined by 7.2% to 1.17 million tons for the April-June period in the first three months of the fiscal year from the same period of last year. Iran is the largest importer of India’s branded and unbranded aromatic rice, as it took a third of all its export in the June quarter. Hit by trade restrictions from the US, Iranian importers pay to Indian basmati exporters in rupees. Many such transactions are done on a private basis without involving banks and regulators. Informed sources say a number of importers dealing primarily with private basmati exporters had defaulted in making payments of around Rs5 billion ($72.5 million). “Usually, exporters get a certificate from Apeda and proper processes are followed. As per trade sources, several large basmati rice exporting firms have become non-performing assets with their bankers, due to non-receipt of payments against the export of large volumes to importers,” said a senior Apeda official, on condition of anonymity. According to trade sources, some Indian exporters were dealing privately with Iranian importers without opening Letters of credit, which guarantee the receipt of money from importers. According to the Apeda official, around a third of India’s basmati exported to Iran faces a threat of default. “We have taken up the issue with the trade ministry in Iran. But, it seems, Indian exporters would have to go only through the legal route to recover the money,” the official added. Apeda has advised exporters not to register contracts for export of basmati or make arrangement for payment before applying to it in this regard. Exports should be against formal orders that include quality specifications and a mechanism for resolution of disputes. “The situation might normalize in a couple of months,” said Gurnam Arora, joint managing director of Kohinoor Foods, an exporter of basmati. “The Indian government needs to look into the problems facing exporters shipping consignments to Iran in view of the increasing threat of US economic sanctions against the Persian Gulf nation,” said Federation of Indian Export Organizations President Ganesh Gupta, noting that the rupee account currently used for payment settlement has limited funds to meet export requirement only for 3-4 months. “Other than UCO Bank, no other bank is willing to deal with exporters who are trading with Iran in view of the US sanctions. The government needs to immediately look at the situation and take steps,” Gupta was quoted as saying by The Economic Times.

How India is paying the price of rice exports to Iran; the story is of crashed markets, reneging buyers

There are whispers in the market that Iranian buyers are yet to pay for 1.25 lakh tonnes of rice—valued at nearly Rs 875 crore—that had been shipped out in 6,000 containers a few months back.

There are whispers in the market that Iranian buyers are yet to pay for 1.25 lakh tonnes of rice—valued at nearly Rs 875 crore—that had been shipped out in 6,000 containers a few months back. (Image: IE) There is now the risk of non-payment/delayed payment/outright loss against large volumes of basmati rice shipped to Iran. There are whispers in the market that Iranian buyers are yet to pay for 1.25 lakh tonnes of rice—valued at nearly Rs 875 crore—that had been shipped out in 6,000 containers a few months back. Small- and medium-sized exporters had entered into contracts with Iranian buyers for rice priced at Rs 65,000-70,000 per tonne—with the average value almost 25% higher than those realised in 2016-17.  Reportedly, the Iranian rice market has crashed and buyers have reneged on the contract price. But after protracted negotiations, cargoes are being accepted at a discounted value of around Rs 44,000-50,000/tonne—which effectively means a price cut of about 30%, or an outright loss of Rs 260 crore. Even then, the payment is being offered on a deferred basis, against future purchases by inflating invoice values. This is as per mutual convenience. However, such settlement may vary depending on the understanding between the parties.  The result of non-payment/loss at such scale is that payments to farmers for the paddy could also get delayed. Suppliers of PP bags, transporters and handling agents at the port may also remain unpaid. Since exporters generally avail pre-shipment credit from banks, ultimately, banks are exposed to the risk of non-payment—that may worsen the bad loan count. Iran has a regular requirement of Indian Pusa 1121 (parboiled) basmati rice, varying between 0.7 million tonnes (mt) to 1 mt annually depending upon its domestic output. Value-wise, Indian shipment to Iran touched $1.8 billion in FY14, but was down, at $0.57 billion, in FY17. India ships out about 4 mt of such rice in to international markets annually without any serious payment problems. It is not the first time that shippers have had to face delayed-/non-payment by Iranian buyers. There have been defaults/short payments in past as well. There has been frequent recurrence of such non-payment, wherein sellers have either suffered a total loss or loss of profit. Even soyabean meal cargoes in the past have met a similar fate. It is immaterial whether the buyer is a private party or an entity run by the government of Iran. The distinctive feature of this trend is that the same Iranian buyers often front new companies as purchasers, while Indian counter-parties conclude rice contracts at seemingly advantageous prices. Once the shipment is made, shipping documents are forwarded usually on DP (documents to be delivered to buyer by the bank against payment) or other terms, but seldom against letters of credit. Iranian buyers dither in making payments through banking channels; shipping documents are allowed to stagnate in Iranian banks or are declared deficient while rice is not lifted from the destination port. With the stalemate on payment and fear of cargo going bad, sellers rush to Iran to settle the matter—resulting in the Iranians forcing discounts or settlement at arbitrary terms.At a time when the government is focusing on farm income growth, it is important that this issue is resolved once and for all. The Agricultural and Processed Food Products Export Development Authority (Apeda) is the India’s controlling body for export of basmati rice. Allowing open and free exports of rice to Iran must be reviewed, and such exports need to be secured with suitable restrictions. Put simply, this could be enforced through a “canalised payment mechanism” via an authorised agency like Apeda. A possible procedural format for this could be as follows: An exporter/seller may sign a contract with an Iranian buyer with the stipulation of 100% advance payment to be made to Apeda within 7-10 days of the contract signing. The date of receipt of payment by Apeda could be treated as the effective date of contract. Apeda then notifies this date to both the seller and buyer; custom may clear cargo offered by seller for shipment after receipt of written acknowledgement from Apeda of payment having been received from Iran. The buyer can nominate its inspection agency with the condition that inspection at loading port being deemed final. Apeda should effect payment to the seller after receipt of shipping documents that require compliance—as agreed in the contract—and issue a “no objection certificate” to the bank of the seller so that foreign exchange earnings accrue to the seller/shipper. In case the seller defaults in making shipment, Apeda should remit the funds back to the buyer at the cost of seller, including any difference in the rate of exchange, and it shall not be liable for any quality/quantity/delayed shipment claims whatsoever. Apeda/the directorate general of foreign trade will also list buyers who have earlier reneged on commitments, as also the brand names of the rice they sell in the Iranian market, and maintain an abeyance list for them. The government can also nominate another trading PSU for the said purpose if Apeda is not willing to undertake this activity. Such a payment security system should be tried for at least two years, and depending upon its efficacy, can be reviewed thereafter. Exports without receipt of full payment retard economic activity. When a suitable security mechanism is introduced and fake importers are filtered out, buyers with respectable credentials and financial capabilities will trade with Indian counter parties. Exports will be truly rewarding when transactions are considered clean and above board and probability of disputes diminish.

At times when Pakistani exporters of textile made-ups are unhappy over the crisis being faced by them in international markets, rice exporters seem happy to avail the opportunity of improving exports to Iran, following restrictions by Iran on rice imports from India. As both India and Pakistan produce the same high quality of rice known as Basmati, the two countries usually compete for major rice consuming countries, especially Iran which is considered a major destination for the long-grained aromatic rice. According to sources, Indian exporters of Basmati rice are facing serious problems in Iran after Tehran put upper limits for import and consumer prices of the cereal. While India’s recent exports of the rice to the West Asian country cost the importer around $950 per tonne (landed price), the ceiling price imposed is $850 a tonne and the maximum consumer price set is $ 1.15 a kg. With the ceiling prices, it would not be economically viable for India to export rice to Iran. Iran consumes more than 3 million tonnes of rice annually and a third of this demand is met by imports. Indian exporters have feared that the crisis in Iranian market would indirectly benefit Pakistan because of its proximity to Iran, as transportation cost was higher for India’s exporters. Not only the ceiling issue but also the uncertainty overuse of currency for trade between Delhi and Tehran has impacted India’s basmati rice exports to Iran following hesitation over the use of the dollar after fresh sanctions levied by the United States on the republic. Indian Basmati exports to Iran had witnessed sharp jump as Delhi launched a rupee settlement mechanism from April 2012 with Iran to avoid sanctions from the US and EU. This situation, as exporters in Pakistan believe, has opened room for exporters here to meet the demand of the neighbouring country. The export of rice mainly Basmati to Iran is being witnessed during the past few months creating over 50 per cent jump in the domestic price of the commodity. “We are largely happy to see the boost in export after a long time crisis faced by the sector,” said an exporter from Punjab. “Not only the crisis in Iranian market but the hike in the domestic price of rice in India following low production has also caused a reduction in export to Middles Eastern countries creating an increased demand for Pakistani rice in the traditional markets,”  he added. According to the data of Pakistan Bureau of Statistics (PBS), the exports of basmati rice from the country during the month of March 2017, increased by 154.28 per cent compared to the exports of the corresponding month of last year. During the month of March, about 45,745 metric tonnes of basmati rice worth US$ 43.976 million were exported as compared to the exports of 17,412 metric tonnes valuing of US$ 17.294 million of the same month last year. It may be recalled that food group exports from the country during the month of March decreased by 10.20 per cent and it was stood at US$ 346.12 million as against the exports of US$385.313 million of the same month last year. In last 3 quarters (July-March) of current financial year food group exports decreased by 11.58 per cent and recorded at US$ 2.885 billion as against the exports of US$ 3.037 billion of the corresponding period last year.

Don’t tax branded rice under GST, cut taxes on procurement: Vijay Setia, president, AIREA

Vijay Setia, president, All Indian Rice Exporters Association (AIREA), spoke on critical issues currently impacting the exporters and millers.

India’s basmati rice exports have seen fluctuations in fortune in the last couple of years because of factors such as slowing down in shipment to Iran. (Image: Reuters) India’s basmati rice exports have seen fluctuations in fortune in the last couple of years because of factors such as slowing down in shipment to Iran, the country’s biggest export destination for aromatic long-grained rice, and delay in settlement in payments from importers. Vijay Setia, president, All Indian Rice Exporters Association (AIREA), spoke to FE’s Sandip Das on critical issues currently impacting the exporters and millers. Edited excerpts: What are the key issues rice exporters and millers would be facing post GST scenario? Although the GST council has recommended 5% taxes on branded rice while exempting the cereals from taxes, we feel that it would make rice sold to economically weaker section costlier. In the current scenario, the processor has to put several information such as name of the company, date of packing etc. as per requirement of weights and measures department and Food Safety and Standards Authority of India on the rice pack. This would make the rice pack as ‘branded’ thus inviting taxes. The next GST council meeting must address the issue as the government has already promised zero tax on rice under GST regime. States with high local taxes such as mandi fees, arthia (commission agents) commission – 2%, rural development cess (2%) etc. on grain trade mostly prevalent in Punjab, Haryana and others. It should be reduced drastically in the post GST roll out. Because of higher taxation, processors or millers are not willing to set up units in these key producing states. You have been pitching for stopping prevalent practice of documents against acceptance (DA) in non-basmati rice exports while in case of basmati rice shipment, DA has been stopped by the commerce ministry. What are the measures AIREA proposes for exporters to follow so that there are no delays in settlement of payment for rice exported? Because of the prevalence of DA, mostly resorted by small sized basmati rice exporters had become a buyers’ market. Often, consignments are not lifted from the port by importers, and thus, the price has to be renegotiated leading to lower realisation. In a fiercely competitive basmati rice exports trade, small players in order to increase the volume of shipment often send rice consignment to importers who use this unsecure credit to their advantage. We feel that because of the practice of DA, the country’s basmati rice shipment has seen a 29% fall to Rs 22,714 crore in FY16, from a record Rs 29,291 crore reported in FY14. However, the volume of basmati exports has risen from 3.7 million tone (MT) to more than 4 MT in the same period. In FY17, despite lower shipment to Iran, our exports declined to around 5% to Rs 21, 605 crore in comparison to previous fiscal. Thus we has urged government to end the practice of DA in exports of non-basmati rice as well. Basmati rice exporters are currently following two modes – cash against document (invoices are delivered to the importer only against payment) and letter of credit (importers instruct their bank to pay exporters as per the specified conditions mentioned in the original documentary credit). These two methods which are followed widely globally. After a sharp fall in basmati rice exports in the last couple of years, what is the prospects of aromatic rice shipment in the current fiscal? In the current fiscal, the realisation from basmati rice exports are set to increase compared to last few years. We have been looking at new market for shipment of basmati rice. Overall in the current fiscal the outlook for exports is quite bright.

LAHORE - The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Thursday said the State Bank of Pakistan would select some local banks within next few days to facilitate trade with Iran. Opening the banking channel with Iran will boost bilateral trade by one hundred percent within one year, said Zubair Tufail, president of FPCCI. Talking to Iranian Ambassador Mahdi Honar Doust, Tufail said, “We are pinning high hopes on the second round of FTA talks with Iran scheduled in July.” He said that despite many commonalities the volume of bilateral trade was unsatisfactory, but resumption of the banking channels would boost trade to five billion dollars per annum as desired by Prime Minister Nawaz Sharif during a meeting with the Iranian foreign minister. Tufail said that business could bring the people of the two countries together and Iran could become a major exporter of petroleum products to Pakistan. He said that Pakistan could import quality pharmaceuticals and steel from Iran and export rice, meat, mutton, fruits and vegetables. Barter trade with Iran can also be explored, he said. A delegation of the FPCCI will visit Tehran soon to explore business opportunities. Both governments should take steps to make business easy, he said. Tufail also called for improved air links between the two countries because many Pakistani businessmen go to Iran via Dubai. On the occasion, Iranian Ambassador Mahdi Honar Doust said that trade between Iran and Afghanistan was three times greater than Pakistan-Iran trade and now it was double the Pakistan-Iran bilateral trade. He said, ”We want to improve trade relations and a monthly meeting will be held between representatives of FPCCI and the embassy officials to find ways and means to improve the trade and overcome hurdles.”

April 28 (Reuters) - Snapshot of the global export markets for grains, oilseeds and edible oils as reported by government and private sources as of end of business on Friday: RICE PURCHASE: Iran's state grains buyer GTC and Iranian private buyers together bought about 120,000-160,000 tonnes of rice sourced from Thailand this week, European traders said on Friday. WHEAT PURCHASE: A group of importers in the Philippines has issued an international tender to purchase up to 55,000 tonnes of feed wheat, European traders said on Friday. Tender deadline is May 2 they said. The wheat was sought for July shipment. PALM KERNEL, COPRA MEAL PURCHASE: South Korea's largest feedmaker Nonghyup Feed Inc. (NOFI) has purchased about 24,000 tonnes of palm kernel expeller meal and around 6,500 tonnes of copra meal in a tender, European traders said on Friday. PENDING TENDERS: WHEAT TENDER: Iraq on Tuesday issued an international tender to buy at least 50,000 tonnes of wheat from the United States, Canada or Australia, traders said. The tender from Iraq's state grains buyer will close on May 7 and offers must remain valid until May 11, they said. WHEAT AND CORN TENDER UPDATE: A Libyan state grain buying agency again delayed the offer deadline in an international tender to purchase 100,000 tonnes of milling wheat, 50,000 tonnes of durum wheat and 75,000 tonnes of yellow corn, this time until May 9, European traders said. The tenders were originally issued in February but have been repeatedly postponed. Shipment of the grains was originally sought in April and May. (Compiled by Michael Hirtzer in Chicago)

 

Delay in resumption of imports by Iran is likely to hinder the recovery in Indian Basmati rice exports, says credit rating agency, ICRA, in its latest update note on Indian Basmati rice industry.

New Delhi [India], Feb. 18 (ANI): Delay in resumption of imports by Iran is likely to hinder the recovery in Indian Basmati rice exports, says credit rating agency, ICRA, in its latest update note on Indian Basmati rice industry. ICRA has estimated this as a temporary delay, considering Iran’s insufficient domestic rice production and depleting inventory levels to meet its demand. In ICRA’s view, the price cap of USD 850 per metric tonne (MT) could pose further hurdles for the Basmati rice industry; given that during the current procurement season average Basmati paddy prices have been higher by 20-25 percent. Thus an inflow of orders from Iran, even after the import ban is lifted, remains to be seen. “Iran is a major export destination for Indian Basmati rice and decline in demand from Iran has played a role in the declining realisations of exports from India – from USD 1298/MT in FY2014 to USD 784/MT in FY2017,” said Deepak Jotwani, Assistant VP, ICRA Ltd. Iran is amongst the major importers of Basmati rice from India. However, over the years, the Iranian Government has imposed a ban on import of Basmati rice from time to time, as per the movement in inventory held by its rice traders and also to safeguard the interests of its local farmers. Iran last imposed a ban on import of Basmati rice in July 2016. Given that the ban persisted against industry expectations, the Government of India sent a trade delegation to Iran in January 2017 to resolve the issue. Following this, it was expected that the import ban would be removed soon. While there has been no official notification from Iran, a group of large Basmati rice importers in Iran have recently capped the price of Basmati rice imports at USD 850/MT. In another adverse development for the industry, the US has recently imposed fresh trade sanctions on Iran, which restrains Iran’s use of the US dollar for trade. These two developments have created uncertainty around the resumption of Basmati rice exports to Iran. While Basmati rice is consumed across the globe, West Asian countries continue to account for most of the imports (75 percent of Indian Basmati rice exports in FY2016). Within West Asia, Iran and Saudi Arabia are the two largest buyers, together accounting for 40 to 50 percent of total Basmati rice exports from India. In the past, Iran had been placed under economic sanctions by the USA, Europe and the United Nations, following which the Government of India implemented the rupee payment mechanism through UCO Bank to facilitate trade between India and Iran. This led to a surge in Indian Basmati rice exports to Iran (primarily Pusa 1121 variety) over FY2013 and FY2014 and it emerged as the largest importer (37 percent) of Basmati rice from India. However since then, exports to Iran have largely been on a downward trajectory owing to the import bans imposed. This has reflected in declining export realisations for the last few years. (ANI) This is published unedited from the ANI feed.

Trade sources believe that Iran is looking to use the euro in place of the dollar

India’s basmati rice exports to Iran, a major destination for the long-grained aromatic rice from the country, is expected to take a big hit after Tehran put upper limits for import and consumer prices of the cereal.

India’s basmati rice exports to Iran, a major destination for the long-grained aromatic rice from the country, is expected to take a big hit after Tehran put upper limits for import and consumer prices of the cereal. While India’s recent exports of the rice to the West Asian country cost the importer around $950 per tonne (landed price), the ceiling price imposed is $850 a tonne and the maximum consumer price set is $ 1.15 a kg. Clearly, realisations of Indian exporters will diminish under the price caps. “This is unilateral imposition of a virtual import tariff. Iran government must realise that prices are decided by demand and supply… It is unfair to impose such restrictions,” a leading rice exporter told FE on condition of anonymity. Iran had been the largest importer of PUSA 1121 variety of basmati rice from India; however, in fiscal 2015-16, India’s exports to Iran almost halved (see chart). Sources said Iran is saddled with excess stocks of basmati rice as FY14 imports of 1.4 million tonnes from India was not exhausted while merchants continued to contract more imports in subsequent years. The high carry-forward stock resulted in shipment to Iran falling to around 900,000 tonnes in the FY15 and further to 700,000 tonnes last fiscal. Some exporters FE spoke to say that with the ceiling prices, it would not be economically viable to export rice to Iran. Iran consume more than 3 million tonnes of rice annually and a third of this demand is met by imports. A 20-member Indian trade delegation comprising exporters and commerce ministry officials visited Iran between January 28 and 30 with a view to promoting exports. The delegation visited various Iranian departments including Food and Drug Organization, Government Trading Corporation and Trade Promotion Organization, Iran Chamber of Commerce and Rice Importers Association. Iran had imposed a ban on rice imports during harvest season between July and November last year. “Domestic supply does not suffice to meet demand. We need imports, but imports that are limited and controlled,” Iran’s agriculture minister Mahmoud Hojjati had stated in November last year. Rice shipments to Iran had got a boost when India launched a rupee settlement mechanism from April 2012 with Iran to avoid sanctions from the US and EU. As part of the initiative, state-owned UCO Bank tied up with Iranian lenders — Parsian, Pasargad, Saman and EN Banks — for settlements of dues. Iran and India also had agreed to have referral labs in India for testing rice consignments rejected by Tehran because of presence of pesticide residue.

New Delhi: India's basmati rice exports are likely to lose out to Pakistan as Iran has fixed its import price at $850 per tonne, which is not viable for Indian suppliers due to higher freight costs. Iran is set to resume issuing permits for the import of rice but Indian traders and officials are concerned. “Indirectly , this will benefit Pakistan because of its proximity to Iran. Transportation costs are higher for us,“ said an official from the Agricultural and Processed Food Products Export Development Authority (Apeda). Indian exporters have sought the import price by Iran to be at least $900 per tonne for the trade to be economical. “Pakistan may be nearer to Iran, but it doesn't have rice to export.We are confident that Iranian companies will understand that India had a 20-30% lower crop than previous year and hence selling below $925 a tonne is not viable,“ said Mohinder Pal Jindal, president All India Rice Exporters Association (Airea). The industry is hopeful that the latest move will not impact them much because Iran has also reduced import duty on rice to 26% from the 40% levied earlier.

NEW DELHI: Iran may soon issue notification to resume Basmati rice imports from India after a 20 member trade delegation visited the country last month. “Government of Iran may soon issue the notification about resumption of issuance of permits for import of rice,” commerce and industry ministry said in a release. The delegation met various departments in the Iranian government including Food and Drug Organisation, Governmental Trading Corporation and Trade Promotion Or ..

Iran "may soon" issue the notification with regard to resumption of issuance of permits for import of rice, the commerce ministry today said. The issue was discussed during a recent visit of Indian official delegation to Tehran last month. To supplement domestic production of about 2 million tonnes, Iran imports about 1 million tonnes of rice every year out of which about 7 lakh tonnes is exported from India. A 20 member trade delegation led by Agricultural and Processed Food Products Export Development Authority (APEDA) visited Iran from January 28-30. The main purpose of the visit was related to promotion of export of rice since Iran is one of the largest importers of basmati rice from India, the ministry said in a statement. About 250 people participated in the sales promotion. The delegation met various departments in the government of Iran including Food and Drug Organisation, Governmental Trading Corporation and Trade Promotion Organisation. Meetings were also held with Iran Chamber of Commerce and Rice Importers Association. "The deliberations helped to dispel the negative publicity which appeared in some part of Iran media causing doubts about the health and safety of rice from India," it said. (This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)

The move is aimed at controlling the prices of targeted commodities in the runup to the upcoming new Iranian year. The government has sharply reduced tariffs on the import of meat and agricultural products, including rice and sugar, to keep prices in check in the runup to the new Iranian year (starting March 21, 2017). Based on a legislation passed by the Cabinet on January 21, tariffs on rice, butter, meat and bananas will be trimmed to 5% from 40%, 20%, 26% and 26% respectively. The new regulation also sharply decreases tariffs on pulses. Lentils will be subject to 10% tariffs–down from the current 15%. Tariffs on various types of beans have also been reduced to 5%. The legislation describes these commodities as “basic, essential and urgent", stressing that the move will take effect as soon as relevant bodies are notified. “The legislation has been passed to control the prices of these commodities, which have increased in the past few weeks,” a source in the Agriculture Ministry told Financial Tribune via telephone on condition of anonymity. “The president himself has issued a directive [to the Agriculture Ministry] to take necessary measures,” he said. “Usually, we do not impose low tariffs on these commodities.” He said the tariff cuts are not permanent and high tariffs are expected to be reinstated after 2-3 months. The administration of President Hassan Rouhani has often placed temporary bans on the import of rice and sugar, among other commodities, in support of domestic producers. The whopping 40% tariff on rice imports comes as the administration bans rice imports altogether during the harvest season. This year the ban was in place from July 21 to November 21. According to the Ministry of Agriculture, Iranians consume more than 3 million tons of rice every year, of which almost 2.2 million tons are supplied by domestic farmers. “This [domestic supply] does not suffice demand. We need imports, but imports that are limited and controlled,” Agriculture Minister Mahmoud Hojjati had said in November. Figures show imports are on the risem despite all the restrictive measures. Importers shipped more than 630,000 tons of rice valued at $527 million into the country during the nine months of the current fiscal year (March 20-December 20, 2016), which registers a 22% and 4% rise in volume and value respectively compared with the similar period of a year before, according to the latest data released by the Islamic Republic of Iran Customs Administration. India is the biggest exporter of rice to Iran. Basmati producers recorded a loss in their stocks last year when Iran imposed the seasonal import restriction. The cut in rice import tariffs is good news for Indian farmers who have been seeking to increase exports following the lifting of Iran’s seasonal ban on imports. Indian newspaper Economic Times earlier reported that Basmati prices are on the rise amid increased Iranian demand. “Basmati rice prices have started increasing, as Iran has allowed imports from India. A formal notification is awaited, but exporters and companies have started getting queries from Iran and some have even started signing contracts,” said Angshu Mallick, COO at Adani Wilmar Limited—Indian supplier of packed basmati rice. India exported more than 4 million tons of rice in 2015-16, of which 1 million tons were shipped to Iran, the report says, adding that this year, the industry expects exports to decline to 3.8 million tons, due to limited exports to Iran. As for sugar, chocolate and candy industries have been complaining in the past few months that the commodity was scarce due to restrictive regulations regarding imports. “Chocolate and candy factories, which are in dire need of sugar, are on the verge of closure,” Jamshid Maghazei, an official with the Association of Iranian Confectionery Manufacturing Companies said in July. Voices of discontent were heard throughout the summer. The claim was ruled out by the government. Hassan Abbasi, the deputy head of state-owned Government Trading Corporation of Iran, which is tasked with importing basic commodities for strategic reserves, said Iran’s sugar reserves were sufficient to meet domestic demand. “The government has no problem in feeding factories and controlling prices in the market.” Periodic bans on sugar imports are imposed mostly to prevent oversupply and support local manufacturers. According to Iran Sugar Association, Iran is currently 70% self-sufficient in sugar production and a complete self-sufficiency is possible within the next four years. Sugar production is estimated to exceed 1.52 million tons by the end of the current fiscal year (March 20, 2017). “Domestic demand for sugar stands at 2.2 million tons annually. Therefore, the import of close to 700,000 tons is needed,” an official with the Ministry of Agriculture, Alireza Yazdani, has been quoted as saying. The government also imports a few hundred thousand tons for its strategic reserves every year. In its latest report on Iran’s agribusiness, Business Monitor International forecast domestic consumption to reach 3.1 million tons by 2020, noting that demand will be mainly driven by population growth and improved macroeconomic conditions following the lifting of sanctions in 2016.

After a sluggish beginning in the first half of the current fiscal, realisation from India’s basmati rice exports is likely to rise in the next couple of months, with Iran likely to resume rice imports shortly.

After a sluggish beginning in the first half of the current fiscal, realisation from India’s basmati rice exports is likely to rise in the next couple of months, with Iran likely to resume rice imports shortly. Official sources told FE that the realisation from the exports of aromatic and long-grain rice rose to $800 a tonne last month from $750 a tonne prevailing in the last couple of months. A commerce ministry official said that exports realisation could reach $900 a tonne in the next couple of months because of lesser supplies because of lower production and firming up global demands. Besides, Iran, the biggest exports destination for India’s basmati rice, is likely to resume imports of rice shortly. The government is sending a trade delegation to Iran later this month for working out modalities for rice exports. According to official data, in the current fiscal, the volume of basmati rice exports to Iran has been around 4.6 lakh tonne, which was essentially from contracts agreed upon in the previous fiscal. The volume of basmati rice exports to Iran had crossed a million tonne (mt) in in FY15. “Iran is expected to take a call on resuming rice imports from India shortly,” a commerce ministry official said. The official also said that due to lower output of basmati rice this year, the prices have started to appreciate in the last couple of weeks. The sowing of basmati across the key growing areas of Punjab, Haryana, western Uttar Pradesh and Uttarakhand had seen a sharp fall of 25% to 1.57 million hectares in the last kharif season, from close to 2 million hectares reported in 2015, thanks to a fall in realisation from exports. But exports of aromatic and long-grained basmati rice fell more than 13% during April–October this fiscal.

NEW DELHI: India is readying to send a delegation to Iran to protect its big basmati rice market in the face of an aggressive campaign by Pakistan to paint the Indian variety as inferior. The delegation comprising government officials and exporters will travel to Iran on January 27-29, Mohinder Pal Jindal, president of All India Rice Exporters Association, told ET. He said the industry is hopeful that Iran will lift the ban on imports of basmati rice from India that has been in place for the past four months. "We have to counter other countries' efforts because our share in Iran's imports has fallen drastically," said a government official, who did not wish to be identified. Iran has been one of the largest importers of Indian basmati rice in recent years. But in 2015-16, however, basmati rice exports from India to Iran almost halved to $571 million from $1.1 billion in the previous financial year. In the first half of this fisc ..