Iran crisis: 60,000 tonnes of basmati rice stuck in ports, exporters seek urgent govt. aid

As close to 3,000 containers containing 60,000 metric tonnes of basmati rice remain stuck at various Indian ports, rice exporters have demanded immediate government aid to face the “severe shipping and logistics disruption” due to the war in West Asia.

Maintaining that India’s rice trade with Africa and West Asia together accounts for about half of national rice exports, the exporters urged the Union government to issue an official advisory recognising the current logistics disruption as a “force majeure type” of exceptional circumstances.

Around 90% of total rice exports towards West Asia, worth about ₹25,000 crore annually, is basmati rice and rice exporters told The Hindu that the situation has impacted their business very badly.

Read: Iran-Israel war LIVE

In a letter to Chairman of the Agricultural and Processed Food Products Export Development Authority (APEDA) Abhishek Dev, the Indian Rice Exporters Federation said the government must issue an official advisory or notification recognising the current disruption as a force majeure type of exceptional circumstance.

“This will ease contractual performance issues and reduce undue pressure from buyers in the form of forced price reductions, penalties, or unilateral cancellations for circumstances beyond exporters’ control. It will also support exporters’ discussions with buyers, banks, insurers and logistics partners,” the letter said.

Amit Goel, founder of KNAM Foods and an exporter of basmati rice, told The Hindu that the exports to West Asia is 30% less than the corresponding period of last year. “Business should have picked up before the beginning of Ramzan month or within Ramzan. The ships are not sailing to eastern ports of Arabic countries. We believe that this is a temporary situation and very soon rice trade will bounce back as it is a staple food,” Mr. Goel said.

Vice-president of IREF Dev Garg said the high period of the trade has already passed and sales are at the lowest level at present. “The major issue today is with respect to containers and other logistical costs. We are seeing a 20% increase in bulk rate and around 40% increase in container freight rates. This is a very significant cost and no exporter is able to bear such a huge increase in transportation,” Mr. Garg told The Hindu.

He said 3,000 containers carrying about 60,000 metric tonnes of rice are stuck at various ports and the IREF is in “minute to minute” touch with the authorities on the situation. He said the IREF has demanded relief measures such as waiver of port-related charges, facilitation for cargo in transit to be returned, redirected or diverted, with Customs/RBI support for documentation and payment adjustments and temporary banking support through ad-hoc working capital limits and credit extension.