NEW DELHI: India’s basmati rice exports may drop to a three-year low this year as the European Union (EU) tightens a fungicide rule and local prices strengthen.
Exports may decline as much as 5% to 3.79 million metric tonnes in the year that began on 1 April from a year earlier, said Vijay Setia, President of All India Rice Exporters Association. That would be the lowest since 2014-15, according to the association’s data.
“We will try to export polished rice to the European Union to avoid the new fungicide norms,” Setia said. According to the European Union’s rule, the residue level of Tricyclazole fungicide in basmati rice should not exceed 0.01 parts per million from 1 January 2018, compared with 1 part per million currently, Setia said. About 80% of India’s basmati rice shipments include unpolished grains. The rest is sold after polishing, which significantly lowers fungicide residues.
Rice companies are expected to focus on the domestic market after a surge in local prices following lower stockpiles and concerns that a drop in the crop area would lead to lower output, Setia said.
Basmati rice exports totaled 2.12 million tons in the six month through 30 September, compared with 2.06 million tonnes a year earlier. Total rice exports climbed to 6.07 million tonnes from 5.43 million tonnes, according to the association’s data.