Geopolitical Tensions Choke India's Basmati Rice Exports

Geopolitical tensions have stalled around 400,000 metric tons of Indian basmati rice at ports and in transit due to soaring freight rates post-attack by the U.S. and Israel on Iran. Exporters face shipping challenges, with no alternative market ready to absorb the existing supply.

Approximately 400,000 metric tons of Indian basmati rice are stranded at ports and in transit, as export deals have dried up due to freight rate increases following the U.S. and Israel's recent attacks on Iran, according to trade officials.

India, the top exporter of aromatic, premium basmati rice, ships primarily to the Middle East, including countries such as Saudi Arabia, Iran, and the United Arab Emirates. "About 200,000 tons are stuck in transit and an equal amount is stranded at Indian ports as the conflict has disrupted shipping lanes in the Middle East," explained Satish Goel, president of the All India Rice Exporters' Association (AIREA).

Exporters have delivered stocks to ports but cannot proceed due to the rising costs of container freight, and no alternative markets are equipped to absorb the current volume. The U.S. and Israeli air offensive expanded on Monday, affecting shipping in the Gulf, with insurance cancellations on vessel coverage escalating global freight rates. AIREA is seeking government assistance over storage and elevated freight charges, Goel added.

(With inputs from agencies.)