Iran, the largest buyer of premium rice from India has witnessed setbacks. The insurers are unable to provide cover to shipments. Iran is the largest buyer of the premium rice from India, and the situation has arisen at the onset of the procurement period by the West Asian country.
In this volatile situation, payments for any shipments will also be delayed by several months.
The All India Rice Exporters Association President Nathi Ram Gupta said that the payments were delayed by five months last year and that exporters are no longer willing to take risks. About Rs 900 crore worth of payments is still pending from the rice that was exported until June 2019.
The basmati rice from India is part of the stape cereal food in Iran. Between 2018-2019, Iran had imported 1.48 million tonnes of basmati rice from India. But in the current year, exporters are circumspect over the delay in payments.
Some of the global basmati buyers other than Iran have increased their purchase this season, as they had anticipated volatility in prices in the coming months.
Watch: Oil prices top $70 a barrel amid West Asia conflict
The rising hostilities in the US-Iran relations have dampened the scope of a revival in basmati trade.
The fears of oil supply disruption also led to possibilities of pressures after US President Donald Trump threatened sanctions on Iraq, the second-largest producer among the Organisation of the Petroleum Exporting Countries (OPEC). Irani parliament voted in favour of expelling the US and foreign troops.
A day earlier, Iran said it no longer considers itself bound by the 2015 nuclear deal negotiated with the United States and other world powers in the fallout from the killing of General Qasim Soleimani.