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India’s basmati export fears to fall this fiscal

The outbreak of Coronabirus has disrupted the basmati rice export from India by around 5 percent over last year’s level during the current financial year. As per Vijay Setia, former president of All India Rice Exporters Association, till January, exports from the country were lower by 1 percent in volumes and about 10 percent in dollar terms. Shipments in February and March have been hit. The overall shortfall in exports for the financial year 2019-20 is expected to be around 5 percent in volumes over last year. The spread of coronavirus to Iran has triggered concerns among the exporters. Iran has purchased only 7.8 lakh tonnes till December end as against 14 lakh tonnes in the previous fiscal. The decline in shipments to Iran is attributed to issue of delayed payments. Payments owed by the Iranian buyers to Indian exporters stood at around Rs 2,000 crore about six months ago, but the issue has largely been resolved now and about 90-95 percent of the payments have been made. On the other hand, an official at AIREA has reportedly said it is too early to assess the impact on exports and we should wait and see how things pan out over the next couple of weeks. Though shipments to Iran have stopped now, orders continue to trickle in from other countries. Indian basmati is purchased by 140 countries. There are small orders coming in from other countries. Saudi Arabia, the second largest buyer of the Indian basmati has purchased about 20 percent more than normal during December-January and is now seen slowing down.