Iran war stalls Gulf-bound farm exports, produce floods local markets

The impact is largely being felt through disruptions in shipments to Gulf countries—a major export destination that accounts for 21.8% of India’s total agricultural and food exports—just as demand peaks during Ramzan

NAVI MUMBAI: The escalating conflict in West Asia has hit India’s agricultural exports, with hundreds of containers bound for Gulf markets stranded near Navi Mumbai and exporters scrambling to offload perishable cargo in local markets, such as the APMC market in Vashi.

Navi Mumbai, India - March 30, 2025:40,000 boxes of mangoes have arrived at APMC on Gudi Padwa, ready to be exported, in Vashi, Navi Mumbai, India, on Sunday, March 30, 2025. (Photo by Bachchan Kumar/ Hindustan Times) (HT PHOTO)

The impact is largely being felt through disruptions in shipments to Gulf countries—a major export destination that accounts for 21.8% of India’s total agricultural and food exports—just as demand peaks during Ramzan.

With shipping routes through the Strait of Hormuz now uncertain, vessel movement has slowed, and freight costs have skyrocketed, according to traders and exporters. Hundreds of containers loaded with fruits and vegetables bound for Gulf markets are stranded at the Jawaharlal Nehru Port Authority (JNPA) and the nearby Centralised Parking Plaza.

Exporters are bleeding financially as logistics costs surge due to war-risk insurance premiums and rerouting. While normal spot rates for a 20-foot container to Dubai typically range from $200 to $450, they have now jumped by nearly 1,400%.

“Shipping lines are constantly reassessing routes; and in some cases, freight costs have touched as high as $10,000 per container. It has completely squeezed our margins,” said Ankush Kadam, a Navi Mumbai-based exporter. He added that daily plug-in charges for refrigerated containers holding bananas and grapes are running between ₹8,000 and ₹15,000, compared with the standard rate of approximately ₹4,150 per day.

To provide relief JNPA has officially waived 80% of these plug-in charges for a 15-day window from February 28 to March 14. According to a trade update from JNPA, coordinated relief efforts have helped reduce the number of stranded perishable containers from a peak of 2,000 on March 1 to nearly 1,000.

Stranded perishables flood local market

With West Asia effectively cut off, Maharashtra’s agricultural commodities are piling up. Exporters are now redirecting export-grade produce back to domestic hubs to prevent total spoilage.

“Exporters are unsure about shipment schedules, and many consignments meant for the Gulf have been temporarily held back. This affects the entire supply chain from farms to mandis,” said Pradeep Sawant, a wholesale trader at the Vashi onion and potato market.

On Tuesday, four cargo containers of export-quality onions that had been stuck at JNPA for days finally arrived for sale at the APMC wholesale market. Ram Chalke, a wholesale trader who unloaded the containers, highlighted the distress sales now taking place. “This premium, export-ready onion was stuck at the port for days,” he said. “To prevent it from rotting, we had to bring it to the Vashi market for domestic sale. Because of this sudden influx, this export-grade onion is now available at a depressed rate of just ₹9 to ₹10 per kg.”

This follows a similar incident last week, when a 30-tonne container of export-grade onions, originally destined for West Asia, was redirected from JNPA to the APMC market for a domestic auction.

Dry fruit supplies choke

While perishables are being dumped locally, incoming supplies of dry fruits have plummeted by 30% to 40%, pushing overall prices up by 15%, according to Dinesh Dang, managing director of Kandhar Traders, a prominent importer at APMC Vashi.

Dang said the trade has suffered a double blow: “Earlier, supplies from Afghanistan came via the Attari border, but that stopped. The alternative route via Iran’s Chabahar Port is now also closed due to the war.” Stocks are currently stranded at transit points in Afghanistan, Iran’s Bandar Abbas, and Dubai’s Jebel Ali port, he added.

The logistical crisis is further compounded by currency volatility and insurance hurdles. “The US dollar has surged from ₹90.50 to over ₹92, making imports like American almonds significantly more expensive,” Dang said, noting that freight for dry fruit containers has also jumped from a normal $850 to $2,500. Furthermore, shipping companies are reportedly offloading containers at the nearest ports as insurance companies refuse to cover high-value cargo in war zones.

Domestic shift and recovery timeline

Even if hostilities cease, recovery will be slow. “Traders in Iran, whom we contact via VPNs, say it will take at least 60 to 70 days for trade to revive even after the war ends,” Dang said. Consequently, wholesale rates have surged: Mamra almonds are at ₹2,800 per kg (up from ₹2,400), pistachios at ₹1,300 (up from ₹1,100), and apricots at ₹1,400 (up from ₹1,200).

This shortage is forcing a shift toward domestic produce, with demand for walnuts from Jammu & Kashmir and raisins from Sangli and Bijapur expected to surge. “With imports stalled, even Indian cashew prices are expected to rise by 5% to 10% as consumers look for alternatives,” Dang said.

The impact is being felt acutely at the farm level in Maharashtra’s export belts. In Nashik, nearly 10,000 tonnes of export-quality grapes still in orchards are now being diverted to the domestic market, while in Jalgaon, farm-gate prices for bananas have crashed by nearly 50%, from ₹22/kg to ₹11/kg, as exporters halt fresh procurement.