The direct impact of the ongoing tension between Iran, Israel and America in West Asia is now visible on India’s trade. Sea trade has been badly affected, especially Strait of Hormuz The supply chain of oil and rice has come to a standstill due to the fear of closure. Thousands of containers filled with Basmati rice are stuck at Kandhla and Mundra ports in Gujarat, raising concerns among both traders and farmers.
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Why was there a ban on export of Basmati rice?
Danger on sea routes has increased due to the conflict between Iran and Israel. Due to this, a large part of the Basmati rice going out of India is stopped at the ports. According to official figures, approximately 2 lakh to 4 lakh tonnes Containers of Basmati rice are currently stranded between Kandhla and Mundra ports or at sea.
Stranded Container: About 3,000 to 6,000 containers are stuck.
Major Buyers: Countries like Iran and Saudi Arabia buy most of India’s Basmati rice (about 40%).
Fare increased: Freight rates have increased from $1,500 to $3,500-$4,500.
Insurance Expensive: Due to increase in risks on sea routes, the cost of insurance has also increased by 40-50%.
Oil prices and its impact on the common man
This crisis can have a deep impact not only on rice but also on India’s energy needs. India meets almost its needs 50% crude oil And 60-80% of the gas (LPG/LNG) is imported through this ‘Strait of Hormuz’. If this route is completely closed, the prices of petrol, diesel and cooking gas may increase in the country.
According to reports, the prices of crude oil (Brent Crude) $80-$85 per barrel Have reached beyond. If crude oil increases even by $1, India’s import bill increases by billions of dollars annually. The government is now considering increasing oil imports from Russia and alternative routes.
Problems increased for farmers and traders
Exporters are suffering huge losses due to stoppage of goods at ports. They have to pay separate ‘Demurrage’ for keeping the container standing there. The Indian Rice Exporters Federation (IREF) has appealed to the government for help.
Its worst impact is on the farmers of Punjab and Haryana:
price drop: Wholesale prices of Basmati rice in the mandis in the last 3 days 7-10% decline Has come.
Affected families: This crisis will affect the income of about 25 to 30 lakh farmer families.
Payment Crisis: There is a fear that payment for old goods may also get stuck due to banking channels with Iran being affected.
