There has always been a demand for Indian Basmati rice in the Middle East market. Buyers from Iran and Saudi Arabia have shown their appreciation and desire to procure aromatic basmati grain used in biryani and pilaf dishes, driving up the sales from India. India has an advantage over other countries in the export of Basmati rice due to quality of the grains from the region and also price competitiveness.
Basmati Rice
This is a long grained aromatic cereal grown mainly at the Himalayan foothills of the Indian subcontinent. The extra long grains elongate to twice the size once cooked and comes with a fluffy texture. The aroma is divine and the taste is delicious. These characteristic features of Basmati are due to the agro-climatic conditions where it is grown and the method of harvesting and aging. As of now, there are 34 varieties of rice in this category. Some of the well known types are organic, brown, super kernel, Pusa 1178, and 11-21 Stella.
Market Drivers
Increasing consumption in the region
This rice variety is an important part of a multitude of cuisines from the region which propels demand for the same. It is used to create some very delectable dishes made with specific layers of meats and dried fruits. There is a growing popularity of this rice and many individuals today are searching for best quality Basmati rice online.
Globally, the Middle-Eastern market is a leading consumer of this aromatic variant of rice, importing mainly from India and Pakistan. It accounts for 37.8 percent of the total consumption. In the Middle East, the GCC countries are the major importers of the grain from India. Iran was the major importer from India in 2018 accounting for over a fifth of India’s import of the paddy crop in that year. Saudi Arabia and the United Arab Emirates accounted for 30 percent of the total exports from the country the same year.
Superior Taste and Quality of the grain
Well cooked and spice infused Basmati rice is one culinary experience that a person would not forget for a long time. This long grained cereal is used to cook biryanis, rajma, pilaf, and more. A beautiful aroma, light golden colour, long kernels, and tapered ends define good quality Basmati. Aged Basmati is better as the rice is fully dried and the grains stay separate after being cooked. No wonder, traders wanting to export Basmati rice are getting a good response from the market.
Rapid increase in population
Iran – a leading importer – is also one of the most populous countries in the region. The country is witnessing a significant increase in its urban population, which recorded an annual growth rate of 1.83 percent in 2017. Saudi Arabia and the United Arab Emirates also recorded a rapid enhancement of urban populace with a corresponding increase in disposable income. These two factors act as catalysts, driving the Indian Basmati Rice market.
Healthy option to other rice variants
This variety of rice is low in fat content and come with additional nutritional value, which makes it a preferred choice among consumers who depend on rice as a staple. Recently, the Middle Eastern market is witnessing a lot of cases of obesity and more and more people are getting aware of their health. This in turn is having a positive impact on the import basmati rice in the region.
Organic basmati is lower in fat content, rich in proteins and vitamins, and is a great source of energy. Brown basmati is preferred by health conscious individuals the world over as it adds a significant amount of fiber to diet. According to latest research, this kind of rice reduces the risk of heart disease while satiating hunger faster. It is also a great option for individuals who are suffering from type 2 diabetes as it comes with a lower glycemic index than most other varieties.
The increase in the availability of high quality rice at competitive costs will also be driving export and import of Basmati rice from the Middle East region.
Policy support from Iran
Iran is the largest buyer of Basmati from India. In fiscal year 2020, the export of Basmati rice to Iran was around 1.32 million tons. Recently the country lifted the seasonal restriction of import of this rice from India, which is expected to improve the import of this cereal in the foreseeable future.
There has always been an annual and cyclical ban of imports of rice in Iran from India during the harvest season from July to mid November to safeguard the interests of farmers in the country.
Overall Agricultural Exports
According to the Annual Report of the Directorate General of Commercial Intelligence and Statistics (DGCIS), agricultural exports from India was of the magnitude of at US$ 28.49 billion in FY21 (April–December). It is expected to grow in the coming years fuelled by a strong demand from market in the Middle East.
Overview by country
Between April and December 2020, the top five countries of the Middle East have been responsible for as much as 20 percent of the total exports of agricultural commodities from India. These five countries are the UAE, Saudi Arabia, Iran, Iraq and Egypt. The two key products exported are meat and Basmati rice.
In the same fiscal year, Iran, Saudi Arabia, Iraq, the UAE and Kuwait accounted for 70 percent of the total Basmati exported from India.
Policy Support from Indian Government
Agriculture Infrastructure Fund (AIF) is all set to enhance infrastructure as per the Union Budget 2021-22. The Agricultural Produce Marketing Committees (APMCs) would be the beneficiaries of Rs. 1 lakh crore financing which they can then use to strengthen infrastructure at regulated agricultural markets. This kind of policy support is expected to have positive impact on agri entrepreneurs and start-ups across the value chain and improve export/import in Basmati and other agricultural products.