New Delhi: The  Red Sea  crisis  is said to have  affected  rice trade, but clarity will emerge only next month, Union  Commerce Minister  Piyush Goyal  said.  

 India is  the  leading exporter of basmati rice, with  more than  4 million  tons exported abroad each year.  India  plans to export 500,000  tons  of new season basmati rice to Europe and the Middle East with  signed contracts.  

 Basmati rice  exports  may be affected due to  disruption of  trade  routes  in the Red Sea region and  grain  prices  are  expected  to increase due to  increased  logistics costs,  as  logistics  companies are  forced to  pause operations  and opt for longer routes to reach  European destinations.  and  the  Middle East. 

  The crisis  emerged after  Yemen’s  Houthi group launched  drone and missile  attacks  on commercial  cargo  ships  in  the southern end of the Red Sea. The Middle East is one of the largest  basmati rice  export  markets.  

  “The disturbances in the Red Sea are real. Currently,  no immediate  effects have been  reported. When the current month’s data  becomes available  next month,  any significant impact  will become  apparent,”  Goyal said. 

  “The  only sector  affected, as  far as I know,  is rice  export.  But more details will be known  when  we get  the  December (trade)  figures,”  the minister said  on Thursday  at an event  organized on the occasion of the  launch  of  the e-commerce  export manual  for  small  and  medium enterprises (MSME).  

  Disruption to maritime activities  in the Red Sea,  which accounts  for a  significant portion  of global container traffic, has led to  increased logistics  costs for  products shipped  through  this  route,  including rice , oil  and manufactured goods. 

  After  banning the export of  non-basmati white rice  in June to stabilize domestic prices, India set a floor  price in August, with a  minimum export price of  1,200 USD/ton to sell  basmati  rice abroad.  This floor price was reduced to  950 USD/ton  in October. 

  According to  data from the Ministry of Commerce,  rice exports  increased  from $6.98 billion a year ago to $6.45 billion  between April and November  2023.  

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