Basmati exports hit by Middle East war as 4 lakh metric tonnes pile up at ports

A sharp escalation in the Middle East conflict has choked India’s basmati rice shipments, leaving nearly 400,000 metric tons stranded at ports and in transit, while new export deals have come to a halt as freight rates have more than doubled since the US and Israel attacked Iran over the weekend, trade officials told Reuters.

India, the largest global exporter of premium aromatic basmati, depends heavily on West Asian markets, with buyers in Saudi Arabia, Iran and the United Arab Emirates accounting for more than half of total shipments.




“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,” Satish Goel, president of the All India Rice Exporters' Association (AIREA), said.

According to Goel, exporters had already positioned consignments at ports, but escalating container freight costs have made shipments to the Middle East unviable. He added that no alternative market is capable of absorbing such large volumes at short notice.

The US and Israeli air campaign against Iran widened on Monday, with Israel striking Lebanon and Iran retaliating by targeting energy infrastructure in Gulf countries and tankers in the Strait of Hormuz. As a result, tankers and container vessels are steering clear of the waterway after insurers withdrew coverage, sending global shipping rates sharply higher.

With cargo lying idle, AIREA has approached the commerce ministry for support, citing mounting storage costs at ports and exposure to higher freight charges, Goel said.

A New Delhi-based dealer with a global trading house told Reuters that exporters are avoiding fresh orders from the Middle East and focusing only on fulfilling existing contracts. Both buyers and sellers recognise the situation as unprecedented, he said, adding that if disruptions persist, some exporters may invoke force majeure.

The trade shock follows a record basmati harvest in India this year. However, the abrupt export slowdown has dragged prices down by nearly 6 per cent.

India and Pakistan are the only countries that widely cultivate basmati, a long-grain variety used in biryani, pilafs and other dishes and sold at a premium in global markets.

“Basmati rice is a staple in the Middle East, and there's really no substitute for Indian supplies,” a Mumbai-based trader said. “Once the war is over, these countries will start stocking up again.”