No cause for concern as Basmati shipments are rising, says AIREA

Data from APEDA show that Basmati exports to Iraq have dropped by over 45 per cent over the last two fiscal years from 6.45 lakh tonnes in 2020-21

Thailand has become the top exporter of rice to Iraq since last year replacing India but Tehran is reportedly buying Thai rice due to currency problems it is facing. 

Iraq imports of rice will likely increase to 2.2 million tonnes (mt) this year, the US Department of Agriculture (USDA) has said. 

Shipments of rice into Tehran from India was over 27 per cent during January-April this year, but Thailand accounted for 57 per cent of the 8.15 lakh tonnes imported during the period. 

Bouncing back

Since 2022, Thailand has become the main supplier to Iraq after losing market share to India and Vietnam since 2014, the USDA said. “Iraq has reduced its purchases of Indian rice due to consumer preference of non-fragrant white rice from Thailand,” it said.  

Bangkok Post quoted Ronnarong Phoolpipat, Director-General of the Thai Foreign Trade Department, as saying that Iraq was the largest importer of Thai rice, buying 1.6 mt in 2022, up 458 per cent from 2021.

He said Iraq is the top importer of Thai rice, accounting for 16.4 per cent of the 2.06 mt of the shipments during January-March in 2023. 

4th largest buyers

According to the USDA, Iraq, set to become the fourth largest global rice importer, has faced multiple issues hampering the grain’s production, mainly due to water scarcity. “Therefore, imports have risen to help meet domestic demand,” the USDA said.

“It is not as if only Thailand is gaining. India’s export of Basmati rice to Iraq is also increasing. Probably, Iraq is buying more from Thailand due to shortage of currency,” said Vinod Kaul, Executive Director, All-India Rice Exporters Association (AIREA). 

For example, Kaul said, Iraq imported 57,000 tonnes of Basmati rice from India in April compared with 35,000 tonnes a year ago. “Exports to Iraq were lower last fiscal when they dropped to 3.64 lakh tonnes against 4.86 lakh tonnes in 2021-22,” he said.

Ground-level problems

Data from APEDA show that Basmati exports to Iraq have dropped by over 45 per cent over the last two fiscal years from 6.45 lakh tonnes in 2020-21. 

Exports have dropped mainly on the fragrant rice’s prices rising to over $1,000 a tonne. Currently, Indian Basmati rice is quoted around $1,500 a tonne. 

Delhi-based trade analyst S Chandrasekaran said the rise in Thailand’s share in Iraq’s rice market is increasing due to “ground-level” problems, which could be non-availability of dollars. “Indian rice is far more competitive than Thai rice. But Basmati cannot be compared with other rice,” he said. 

US entry

“There is no cause for concern over the developments in the Iraqi rice market. Not every consumer can afford Basmati rice and people will look to consume as per their affordability,” AIREA’s Kaul said. 

On the other hand, Chandrasekaran said the US, which had exited the rice market a few years ago, has begun efforts to re-enter the global market. “US re-entry and plans to expand its rice market reach are warning signs for India and other Asian countries,” he said, adding that Washington is striking deals with smaller nations. 

The US has exported 88,000 tonnes of rice to Iraq, making up 11 per cent of total imports. The USDA said Iraq has signed a memorandum of understanding with the US for 2022-2023 that calls for Iraq to purchase up to two lakh tonnes of the US rice. Another 44,000 tonnes of rice were shipped to Tehran in May, the agency said. 

Published Date: June 13, 2023