Nearly 400,000 metric tons of Indian basmati rice are stranded at ports and in transit, severely impacting export deals as the freight rates have more than doubled amid the Iran attacks, reports said.
“Around 200,000 tons of basmati rice are stuck in transit, and an equal amount is stranded at Indian ports as the war has disrupted shipping routes across the Middle East,” said Satish Goel, president of the All India Rice Exporters’ Association (AIREA), as reported by Reuters.
Notably, India is the world’s largest exporter of aromatic, premium basmati rice, with buyers in the Middle East, including Saudi Arabia, Iran, and the United Arab Emirates, accounting for more than half of its shipments.
Exporters have already moved stocks to ports, but cannot ship to the Middle East because of rising container freight costs, and no alternative market can absorb the volume, Goel said.
He further said AIREA has approached India’s trade ministry for help as exporters face storage costs for stocks held at ports and, in some cases, higher freight charges.
According to the reports, India has had a record basmati harvest this year, and the sudden slowdown in export demand has brought prices down by nearly 6%.
The gold prices have also risen over 1% after the US and Israel launched major strikes on Iran, escalating geopolitical tensions in West Asia and deepening global economic uncertainty.
Bullion, traditionally viewed as a safe-haven asset during times of crisis, has already scaled successive record highs this year.
Further, a report by ICICI Bank said the crude oil prices may surge above the USD 100 per barrel threshold if there is any structural disruption to oil infrastructure amid the ongoing military escalations in West Asia.
The report stated that Brent crude prices are expected to trade in the USD 75 per barrel to USD 95 per barrel range in the near term, with risks that oil prices could move towards the higher end of this range.