7 Reasons Why Basmati Rice Export is Booming in India
Basmati rice is one of the most popular and premium varieties of rice in the world. It is known for its long grains, fragrant aroma, and delicate flavor. Basmati rice is mainly grown in India and Pakistan, and India is the largest exporter of basmati rice globally. According to the Agricultural and Processed Food Products Export Development Authority (APEDA), India exported 4.45 million tonnes of basmati rice worth Rs 31,025 crore in 2022-23, registering a growth of 13.57% in volume and 16.89% in value compared to the previous year.
But what are the factors behind this impressive growth of basmati rice export from India? Here are some of the reasons why basmati rice export is booming in India:
1. High demand from the Middle East and Europe
The Middle East and Europe are the major markets for basmati rice export from India, accounting for about 80% of the total export volume. These regions have a large population of expatriates from South Asia, who prefer basmati rice as a staple food. Moreover, basmati rice is also gaining popularity among the local consumers in these regions, who appreciate its quality and taste. Some of the top importers of basmati rice from India are Iran, Saudi Arabia, Iraq, UAE, UK, Germany, and France.
2. Diversification of export destinations
Apart from the traditional markets, India is also exploring new avenues for basmati rice export, such as Africa, America, Australia, and Southeast Asia. These regions have a growing demand for basmati rice due to their increasing disposable income, changing food habits, and awareness about the health benefits of basmati rice. Some of the emerging markets for basmati rice export from India are Nigeria, Ghana, Kenya, USA, Canada, Australia, Singapore, Malaysia, and Indonesia.
3. Competitive pricing and quality
India has an edge over other basmati rice exporters in terms of pricing and quality. India produces a wide range of basmati rice varieties, such as Pusa Basmati, 1121 Basmati, 1509 Basmati, Taraori Basmati, etc., which cater to different preferences and budgets of the consumers. Indian basmati rice is also known for its high quality standards, as it undergoes rigorous testing and certification by APEDA before being exported. Indian basmati rice is also compliant with the international norms and regulations regarding pesticide residues, aflatoxins, heavy metals, etc.
4. Government support and incentives
The Indian government has been supportive of the basmati rice export industry by providing various schemes and incentives to boost its growth. Some of these include:
- The Merchandise Exports from India Scheme (MEIS), which provides duty credit scrips to exporters based on their export performance.
- The Transport and Marketing Assistance (TMA) scheme, which provides assistance for the transport and marketing of agricultural products.
- The Market Access Initiative (MAI) scheme, which provides financial assistance for market development activities such as participation in trade fairs, exhibitions, buyer-seller meets, etc.
- The Export Promotion Capital Goods (EPCG) scheme, which allows import of capital goods at concessional rates of customs duty for export production.
- The Interest Equalization Scheme (IES), which provides interest subsidy on pre-shipment and post-shipment credit to exporters.
5. Innovation and value addition
The Indian basmati rice exporters are also investing in innovation and value addition to enhance their competitiveness and profitability. Some of the examples of innovation and value addition are:
- Developing new varieties of basmati rice with improved yield, quality, and resistance to pests and diseases.
- Adopting modern technologies and practices for cultivation, harvesting, processing, packaging, and storage of basmati rice.
- Offering organic basmati rice certified by accredited agencies such as USDA Organic, EU Organic, etc.
- Offering ready-to-eat or ready-to-cook basmati rice products such as biryanis, pulao, kheer etc.
- Offering customized solutions to meet the specific requirements of different customers such as private labels, halal certification, gluten-free etc.
6. Branding and promotion
The Indian basmati rice exporters are also focusing on branding and promotion to create a distinct identity and reputation for their products in the global market. Some of the strategies adopted by them are:
- Registering geographical indications (GIs) for basmati rice such as Basmati Rice (India), Pusa Basmati Rice (India), etc., to protect their exclusivity and authenticity.
- Creating umbrella brands such as India Gate Basmati Rice, Daawat Basmati Rice, Kohinoor Basmati Rice, etc., to showcase the diversity and excellence of Indian basmati rice.
- Participating in international trade fairs, exhibitions, seminars, workshops, etc., to showcase their products and network with potential buyers.
- Launching online platforms and social media campaigns to reach out to the global consumers and increase their awareness and loyalty.
7. Future prospects and opportunities
The Indian basmati rice export industry has a bright future and immense opportunities to grow further in the coming years. Some of the factors that will drive the growth of basmati rice export from India are:
- The increasing global population and urbanization, which will create more demand for food products, especially rice.
- The rising income levels and living standards of the consumers, especially in the developing countries, which will enable them to afford premium products such as basmati rice.
- The changing consumer preferences and trends, such as health consciousness, convenience, variety, etc., which will favor basmati rice over other types of rice.
- The growing awareness and recognition of the Indian basmati rice brand in the global market, which will enhance its reputation and demand.
Basmati Rice Export: A Global Overview
Basmati rice is a type of aromatic rice that is grown mainly in India and Pakistan. It is highly valued for its long, slender grains, fragrant aroma, and delicate flavor. Basmati rice is one of the most exported varieties of rice in the world, accounting for about 20-22 percent of global rice trade . According to the basmati rice export data from World Integrated Trade Solution (WITS), the total value of basmati rice exports in 2020 was $4.3 billion, down from $4.8 billion in 2019 .
The main destinations for basmati rice exports are Nepal, United States, and United Arab Emirates, which together imported about 50 percent of the total basmati rice exports in 2020 . India is the largest exporter of basmati rice, with a market share of more than 95 percent. India exported 840,193 shipments of basmati rice in 2020, worth $4.1 billion . Pakistan is the second-largest exporter of basmati rice, with a market share of about 4 percent. Pakistan exported 32,784 shipments of basmati rice in 2020, worth $172 million . China is the third-largest exporter of basmati rice, with a market share of less than 1 percent. China exported 5,825 shipments of basmati rice in 2020, worth $14 million .
Factors Affecting Basmati Rice Export Demand
The demand for basmati rice exports depends on various factors, such as consumer preferences, income levels, population growth, exchange rates, trade policies, and weather conditions. Some of the factors that have influenced the demand for basmati rice exports in recent years are:
The COVID-19 pandemic
The pandemic has disrupted the global supply chains and logistics of basmati rice exports, affecting both the availability and the prices of the commodity. The pandemic has also reduced the demand for basmati rice in some markets, such as restaurants and hotels, due to lockdowns and social distancing measures. However, the pandemic has also increased the demand for basmati rice in some markets, such as households and online platforms, due to increased consumption at home and e-commerce sales .
The Iran sanctions
Iran is one of the largest importers of basmati rice from India, accounting for about 30 percent of India’s basmati rice exports. However, the US sanctions on Iran have hampered the trade relations between the two countries, affecting the payment and shipment of basmati rice. The sanctions have also reduced Iran’s purchasing power and currency value, making basmati rice more expensive for Iranian consumers .
The African market
Africa is one of the fastest-growing markets for basmati rice exports, especially for non-basmati varieties. The demand for basmati rice in Africa is driven by factors such as population growth, urbanization, income growth, changing food habits, and cultural diversity. The African market offers opportunities for basmati rice exporters to diversify their markets and increase their competitiveness .
Future Prospects for Basmati Rice Export
The future prospects for basmati rice export depend on how the above-mentioned factors evolve in the coming years. Some of the challenges and opportunities that may affect the basmati rice export are:
The climate change
Climate change poses a threat to the production and quality of basmati rice, as it may affect the availability and distribution of water resources, soil fertility, pest and disease incidence, and crop yield. Basmati rice exporters need to adopt climate-smart practices and technologies to enhance their resilience and sustainability .
The quality standards
Quality standards are becoming more important for basmati rice exporters, as consumers are becoming more aware and demanding of the quality attributes of basmati rice, such as aroma, flavor, texture, appearance, and nutritional value. Basmati rice exporters need to comply with the quality standards and regulations of their destination markets, as well as improve their traceability and certification systems .
The innovation and diversification
Innovation and diversification are essential for basmati rice exporters to maintain their competitive edge and meet the changing needs and preferences of consumers. Basmati rice exporters need to invest in research and development to improve their productivity and efficiency, as well as introduce new varieties and products of basmati rice that cater to different segments and niches of consumers .
References:
https://apeda.gov.in/apedawebsite/about_apeda/Basmati_Characterstics.pdf
http://www.brc.org.uk/Downloads/Basmati_Code.pdf
https://core.ac.uk/download/pdf/141886106.pdf
https://www.fao.org/markets-and-trade/commodities/rice/fao-rice-price-update/en/
https://www.ers.usda.gov/topics/crops/rice/rice-sector-at-a-glance/
https://www.volza.com/p/basmati-rice/export/
https://www.seair.co.in/blog/basmati-rice-export-data.aspx
https://www.apeda.gov.in/apedawebsite/Annual_Reports/APEDA_Annual_Report_2022-23_English.pdf
http://tribune.com.pk/story/410164/global-market-pakistani-basmati-may-slip-down-the-pecking-order/
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