Red Sea Crisis Threatens India's Basmati Rice Exports, Says Commerce Minister Piyush Goyal

New Delhi, Dec 29 (KNN) “The current turmoil in the Red Sea region has raised concerns about its potential impact on India's rice exports.” stated Union Commerce Minister, Piyush Goyal.

“However, more clarity will emerge in the coming month.” he added as per a report in Mint.

India stands as a prominent exporter of basmati rice, dispatching over 4 million tonnes annually.

With already established contracts, India aspires to export an additional 500,000 tonnes of the new season's basmati rice to both Europe and the Middle East.

As highlighted in previous reports, the challenges faced by basmati rice exports have been attributed to disruptions in trade routes within the Red Sea region.

These disruptions may lead to an increase in logistics costs, especially since logistics companies have to take longer routes to serve Europe and the Middle East.

The root cause of this crisis traces back to Yemen’s Houthi group, which initiated drone and missile attacks on commercial vessels in the southern stretches of the Red Sea, a region crucial for basmati rice exports to the Middle East.

Addressing the situation, the Union Minister remarked, "The disruptions in the Red Sea are undeniable.”

“While we haven't observed immediate repercussions, a clearer picture will emerge next month with the release of the latest trade data." he added.

Speaking further at an event introducing the e-commerce exports handbook for MSMEs, he mentioned, "The rice export sector appears to be the most impacted, and we await the December trade figures for more insights."

It's worth noting that India, in a bid to stabilise domestic rice prices, halted non-basmati white rice exports in June.

Following this, a floor price of USD 1,200 per tonne was established for basmati exports in August, which was revised to USD 950 per tonne by October.

According to the commerce ministry, rice exports decreased from USD 6.98 billion in the preceding year to USD 6.45 billion from April to November 2023.

(KNN Bureau)