Reluctance among Indian traders to ship premium basmati rice to Iran as U.S. sanctions hobble its ability to pay has contributed to a sharp drop in overall exports from the world’s biggest supplier of the grain, trade and government sources said.
Rice shipments from India slipped by more than a quarter to 5.5 million tonnes between April and November 2019 — the first eight months of the fiscal year — from 7.5 million tonnes in the year-ago period, the sources said. In terms of value, exports dropped 19% to $3.8 billion from $4.7 billion.
The grain is India’s biggest foreign exchange earning farm commodity, with shipments worth $7.75 billion in the 2018/19 fiscal year.
Basmati rice exports to Iran, New Delhi’s top buyer of the aromatic grain, dropped to 600,000 tonnes in the eight months from 900,000 tonnes a year earlier, but traders, worried about delayed payments, have not signed any new contracts with Tehran in the past five days, the sources said.
Shipments are not expected to significantly pick up, with buyers in Iran owing a record 20 billion rupees ($281.41 million) to India as U.S.- imposed sanctions make it hard to pay for imported commodities, they added.