India’s basmati rice exports are facing disruption amid the ongoing conflict involving the United States and Israel on one side and Iran on the other, as instability along key maritime routes pushes up freight, fuel and insurance costs while affecting container availability and vessel schedules.
Industry estimates suggest around 400,000 metric tonnes of basmati rice is currently stuck at ports or mid-transit, with exporters struggling to ship consignments because of shipping disruptions and rising freight costs.
Exporters are now seeking urgent government intervention to help ease the pressure on contracts and cash flows.
The Indian Rice Exporters’ Federation (IREF) has urged the government to introduce immediate relief measures for exporters facing severe disruption in shipping and logistics following the crisis, warning that rising freight, fuel and insurance costs are putting pressure on export contracts and cash flows.
There is an acute shortage of containers, while some shipping lines have suspended or cancelled vessel calls to parts of the West Asia, one of the largest markets for Indian basmati rice, exporters have reported. International freight costs have risen sharply, with overall charges increasing by around 15-20 per cent, according to the federation.
Container freight rates on the Asia-West Asia route have surged from roughly $1,200-$1,800 per FEU (forty-foot equivalent unit, standard measure for container) to between $3,500 and $4,500, almost three times. (Courtesy: DTE)