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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