The West Asia conflict threatens to cast a pall over Punjab’s Basmati harvest as disrupted shipping routes, soaring freight costs and uncertainty over overseas markets force exporters and millers to scale back purchases from mandis.
According to Bal Krishan Garg, president of the Basmati Exporters’ Association Punjab, India exports around five lakh tonnes of Basmati rice every month, and Punjab accounts for nearly a third of these exports.
“Exporters from Punjab exported around 1.6 lakh tonnes of Basmati every month before the war broke out in West Asia this February. This has fallen significantly as shipping lines have limited and freight rates have shot up around 10 times of what they used to be pre-conflict,” Garg said.
He said the cost of sending a container to Dubai, which was around $500 ( ₹47,967) earlier, has now risen to more than $5,000 ( ₹4,79,677). The steep increase in freight costs has contributed to the decline in exports, he added.
Saudi Arabia is among the biggest buyers of Basmati rice. Earlier, shipments were routed to Dammam port in the Gulf. However, consignments to Saudi Arabia are now being routed through Jeddah port on the Red Sea side of the Arabian Peninsula as shipments to Dammam have become difficult.
{{/usCountry}}Saudi Arabia is among the biggest buyers of Basmati rice. Earlier, shipments were routed to Dammam port in the Gulf. However, consignments to Saudi Arabia are now being routed through Jeddah port on the Red Sea side of the Arabian Peninsula as shipments to Dammam have become difficult.
{{/usCountry}}Garg said recent activity by the Houthis around the Bab al-Mandab strait could also make the Jeddah route difficult, further adding to uncertainty over exports.
The limited storage capacity of millers is another concern as the Basmati crop begins arriving in mandis.
Garg said storage capacity could not be increased at short notice, leaving millers with little room to absorb larger quantities if exports remain subdued. They are therefore expected to reduce purchases from mandis, he said.
The association represents 30 exporters and 145 millers in Punjab.
Robin Goyal of Moga-based GG Agrotech, which also exports Basmati to the region, said its exports had fallen to around half their pre-February level.
Goyal said the company had procured around 80,000 metric tonnes of Basmati from mandis last year. This year, it plans to buy no more than 50,000 metric tonnes.
“There is uncertainty. Who knows how long this will continue? What if the produce keeps sitting in the godown and is ruined before it can be exported?” he said.