CHANDIGARH: The US-Iran confrontation has hurt Basmati rice growers of Punjab and Haryana and hit the economy hard. With sales to Iran, which constituted 30% of the trade, nose-diving on the back of a ban by the European Union over complaints of pesticide residue in grains, Punjab tenants are facing a glut and sliding prices.
Ashik Sethi, Director of Punjab Rice Millers Exports Association, said India exported Basmati about 40 lakh ton worth Rs 36,000 crore to some 100 countries, which is now down 50%. Iran alone bought some 14 lakh ton worth Rs 12,000 crore. With the Gulf turning a conflict zone no exporter wants to risk shipments.
“Since May last year, exports to Iran have come down as India is not buying oil from them under the bilateral rupee trade agreement. Basmati exports were also affected as payments were delayed.
Now it has totally stopped,’ said, traders.
They said, earlier EU’s pesticide restriction rules kicked in and exports to Europe slipped from 4 lakh ton to 1.35 lakh ton and Basmati prices dropped to Rs 2600 to Rs 2,700 per quintal against last year’s price of Rs 3,600 to Rs 3,700 per quintal.
Sethi says, “In 2011, USA started rejecting Basmati rice shipments due to pesticide issue and EU and GSS states like Saudi Arabia, which imported 35% of the stock, followed. The Centres mandate in November that EU consignments be tested by the Export Inspection Agency (EIA) of the union, which charged Rs 1,450 per ton added to costs and misery.