West Asia crisis hits rice exports from MP districts

Export of basmati and boiled non-basmati rice from Madhya Pradesh to several countries has been severely impacted by the West Asia crisis, stakeholders in the sector said on Saturday.

Basmati rice from Raisen and boiled non-basmati rice from Balaghat have a distinct identity and are exported to many foreign countries, including the Gulf, they pointed out.

“Basmati rice destined for export from Raisen district is stuck in ports, factories and warehouses. Freight rates have increased by 30 per cent, and there is a shortage of containers. Exporters are also facing a backlog of goods at ports. All this has made it difficult to fulfil orders on time,” Ajay Bhalotia, All India Rice Exporters Association general secretary, said.

More than two dozen rice factories operate in Mandideep, Satlapur, Obedullaganj, Raisen, Bareilly, Udaypura, and Umraoganj areas of Raisen district, with high-quality basmati rice making its way to markets in Iran, Iraq, Saudi Arabia, Jordan, Dubai, etc, he said.

Halt in exports due to the Iran war has temporarily closed down some rice units in the district, leaving the once-thriving sector in trouble, Bhalotia added.

“The price of Pusa Basmati rice has fallen by Rs 300-500 per quintal. This has disrupted and reduced the arrival of paddy and raw materials, weakening the supply chain. It has distressed farmers. If the war continues for a long time, small and medium-sized industries will be particularly affected,” said Raisen Rice Factory operator Manoj Soni.

The West Asia crisis has hit the district’s economy, and even containers are now in short supply, Rajiv Agarwal, former president of the Association of All Industries, said.

“Earlier, a container used to be available here for USD 2,500. Now, it is not easily available even for USD 3,200. The increase in freight has directly increased the cost of exports. Moreover, goods that have already been shipped from here are stuck at ports. It is affecting the payment cycle and increasing pressure on the working capital of industries,” Agarwal said.

Anil Jain, a wholesale rice trader, said the arrival of paddy in the market has started decreasing, and farmers have only a few days’ stock.

A district official claimed high-quality Pusa rice is cultivated in Raisen, which is exported with Haryana’s GI (geographical indication) tag.

Raisen district cultivates paddy on approximately 3.45 lakh hectares and produces over 6 lakh tonnes of rice, he informed.

Similar is the situation with boiled non-basmati rice grown in abundance in Balaghat, sector stakeholders said.

“Local millers used to export large quantities of this rice from Balaghat, Warasivani, Katangi, and surrounding areas. Before the war, approximately 500 tonnes of rice were exported daily, but this has been severely affected by the current Gulf crisis. Rice exports to East African countries have virtually ceased, while limited exports to West Africa continue,” prominent industrialist Palash Somani contended.

The significant increase in sea freight has made the trade even more unprofitable, resulting in financial losses for millers, he added.

According to sources, approximately 25 per cent of the business of large industrialists has been affected, while those on a smaller scale have come to a standstill.

This decline in exports will have a direct impact on the district’s rice market, resulting in a drop in the per quintal price from the current Rs 1800 to Rs 1600, a unit owner said, adding this would be significantly lower than the Government-determined minimum support price (MSP) of Rs 2,382.

Balaghat’s non-basmati boiled rice is exported with a special identification, bearing the district’s tag, and is primarily shipped abroad through the Mumbai port, he informed.