India Faces Decreased Basmati Rice Prices Amidst Red Sea Attacks – Get the Details
Published on: December 29, 2023.
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Basmati Rice Prices Decline as Exports are Affected by Attacks on Merchant Ships
Basmati rice prices in the domestic market have experienced a 5-10 percent decrease due to a reduction in exports caused by militant attacks on merchant ships in the Red Sea. This information has been reported by exporters, as mentioned in an article by the Economic Times.
The attacks led by Yemen’s Houthis have resulted in shipping lines avoiding the Suez Canal route, which has had an impact on the import of sunflower oil from Russia and Ukraine as well. Trade insiders, as cited in the ET report, state that sunflower oil prices in India are expected to rise by 3-4 percent due to this situation.
In the international market, sunflower oil prices have already surged by $30 per tonne within the past week, reaching $940 per tonne.
The attacks have also caused a significant increase in freight charges. Previously, the freight charge to Yemen was $850 per container, but it has now risen to $2,400 as a result of the attacks. Likewise, freight rates to Jeddah have increased from $300 per container to $1,500, while the rate to Durban has gone up to $700 per container, compared to the previous cost of $1,200.
Vijay Setia, the former president of the All India Rice Exporters Association, stated in the ET report, “Due to this increase in freight charges, buyers are currently not taking cargo. Consequently, prices of basmati rice have decreased in the domestic market.”
It is important to note that India exports approximately 4-4.5 million tonnes of basmati rice per year, with the Gulf countries accounting for around 80 percent of all basmati exports.
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