Iran temporally lifts ban on rice imports amid drought concern

Iran temporally lifts ban on rice imports amid drought concern

Baku, Azerbaijan, April 22

By Farhad Daneshvar – Trend:

Iran, a rice growing country, has reportedly permitted merchants to import the strategic product as the ongoing water crisis has triggered concerns in the country.

"Following a decision by the senior government officials, from today on, importing rice from all crossings is legal and the importers only need to observe the regulations set by the standards organization as well as Health Ministry," an official with the country’s agriculture ministry told ISNA news agency on April 22.

Under the new directive, the merchants are allowed to import rice until July 22 and there will be no changes in the customs tariffs on the imports of the product.

Iran normally allows imports of rice in late September when the local farmers have concluded cultivating the cereal grain and again limits the imports in late July.

The Islamic Republic imported worth of $1.2 billion of rice over the last fiscal year which ended on March 21.

Rice producer turns into importer

Over the past several years Iran has turned into a large importer of rice as India and Pakistan have secured a strong position for their rice in the Iranian market.

In 2010, Iran imported $916 million worth of rice, out of which $369 million were from India, giving it a 40 percent share in the Iranian market. By 2014, the Indian share in Iran’s rice market had gone up to 89.51 percent ($1.28 billion in rice imports from India out of the total Iranian imports of $1.43 billion), Financial Tribune reported.

The share of Indian rice in Iran rose further to 92 percent in 2015 ($729.71 million). In 2016, the Indian share came down to 72.82 percent ($503.02 million).

By contrast, Pakistan’s export of rice to Iran fell from $124.76 million in 2010 to $15.64 million in 2014 and further to $3.47 million in 2015 before rising to $8.48 million in 2016.

Thus between 2010 and 2016, the share of Pakistan’s rice in Iranian market went down from 13.62 percent to 1.22 percent.

Being a water-scarce country, Iran is set to limit rice production, which will create a significant opportunity for rice exporting countries, including Pakistan.

Water crisis

The Islamic Republic of Iran Meteorological Organization earlier announced that about 97 percent of the country is experiencing drought to some degree.

Addressing the nation on the occasion of the beginning of the new Iranian year President Hassan Rouhani and Supreme Leader Ayatollah Khamenei mentioned drought as a problem that needs to be addressed.

Iran's total annual water consumption is approximately 93 billion cubic meters, out of which about 92 percent is used in agriculture (86 billion cubic meters), 6.6 percent in municipality (6.18 billion cubic meters), and 1.2 percent in industry (1.12 billion cubic meters), according to the United Nations Food and Agriculture Organization. According to the country’s officials, up to 70 percent of water used in the agriculture sector is being wasted.

Over the past months, Iran has seen several protests in different cities due to the drought.

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