Rice exports from Uttar Pradesh have been severely disrupted due to the ongoing West Asia tensions leading to a decrease in demand, a sharp price fall, and halted payments. Prices of Basmati as well as non-Basmati rice have fallen around 30%. Additionally, payment mediums to significant buyers such as Iran remain highly affected, as reported by exporters and traders who further stated that importers stopped purchases in the ongoing conflicting circumstances. District marketing officer Vinod Kumar Kaithal confirmed that orders from West Asia had reduced in the comparison to previous year as he asserts: “due to reduced exports, farmers are not able to get better open-market prices for paddy this year. In addition, the revenue has decreased and less and exports are becoming a pain to millers”.
Rice Exports disrupted affecting farmers
Notably, traders who conduct large exports have told that they earlier exported rice milled from local paddy to West Asia earlier but now the exports have disrupted, the demand has suddenly declined whereas the production is going on. Moreover, prices from paddy to milled rice have fallen. It instantly reduced revenue of govt., and directly affects farmers, who are not getting higher rates. Farmers cannot store their harvest for long hoping to sell it on good prices. Hence, they have to sell facing loss.
Dollar shortage and delay in large payments
A rice mill owner from Manipuri stated that the shortage of dollar in Iran had delayed large payments as the reduction in oil imports from Iran had discarded payment settlement channels that earlier promoted rice trade. In addition, had also the freight costs have been increased by two-and-a-half times amid Red sea disruptions. While another rice mill owner told that market has diminished for four to five months since Iran has a pivotal role and in the recent weeks, prices of all categories of rice have been decreased by Rs.200-300 per quintal
Undoubtedly, rice exports will be difficult, impacting farmers, millers, and government revenues on frequent basis, till the geopolitical conflicts resolve and the payment pathways are reactivated