Akshay Gupta, Head of Bulk Exports at KRBL, highlighted the importance of this collaboration, stating, “Launching our India Gate basmati rice range at Tesco not only strengthens our global market presence but also underscores our commitment to offering high-quality, exclusive products. This partnership is a key component of our strategy to expand into new regions, including Europe and North America.”

With Tesco’s extensive network of 2,904 retail stores across the UK, KRBL is poised to significantly boost its sales and market share in Europe. The collaboration with Golden Acre Foods, Tesco’s strategic partner in World Foods, has been instrumental in facilitating this launch and is expected to provide a robust platform for KRBL’s future growth in the region.

KRBL’s expansion into the UK market comes as part of its broader strategy to increase exports and expand its footprint in international markets. The company remains optimistic about its growth prospects, driven by its ongoing efforts to introduce India Gate basmati rice and other KRBL products to a wider audience, allowing consumers to experience the rich heritage and superior flavour of its offerings.

KRBL plans to continue its expansion in Europe and North America through strategic collaborations and enhanced product offerings, solidifying its position as a global leader in the basmati rice market.

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The standstill is largely attributed to erratic internet issues impacting the banking sector, which in turn hampers export processes. Despite these challenges, there is cautious optimism among Indian exporters that the situation might be temporary, with hopes for a return to normal operations soon.

Sahai also noted the impact on investments, indicating that while immediate plans in Bangladesh are currently on hold, stakeholders are closely monitoring the situation. Communication between FIEO and Indian exporters remains strong, with some considering fulfilling urgent orders from India to address customer demands during this period of uncertainty.

In the previous financial year, bilateral trade between the two countries was valued at approximately USD 12.8 billion. India’s exports to Bangladesh included commodities such as cotton, petroleum products, and food items, while Bangladesh’s exports to India primarily comprised textile and leather products, along with agricultural goods.

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In response to this shortage, pineapple producers from India and Indonesia are seeking to export their de-crowned pineapples to Australia. The Australian Department of Agriculture, Fisheries and Forestry is assessing the biosecurity risks associated with these potential imports.

Australian farmers are concerned about the impact of imported pineapples on the local market. They fear that cheaper imports could lead to increased competition, affecting their sales and pricing. The final decision on whether to allow these imports will influence pineapple prices in Australia and could alter the dynamics between local and international producers.

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India, as one of the only two producers of Basmati rice in the world, holds a significant position in the global market. The country is the largest exporter of this long-grained, aromatic rice, with a substantial market share in Europe, the Middle East, Africa, and other key regions. Indian Basmati rice variants, such as Basmati 370, Pusa Basmati, and Conventional Basmati, are highly regarded for their distinctive aroma and exceptional taste, making them highly popular globally.

Competition and Market Dynamics

Despite India’s dominance, Indian Basmati brands face competition both domestically and internationally. Pakistan, the only other producer of Basmati rice, contributes minimally to global production and exports. Thus, the primary competition is among Indian brands and a few international brands that source Basmati rice from India and white-label it for their markets.

Indian Basmati rice brands are well-established in markets like the UK, Europe, Africa, and the Middle East, where demand often exceeds supply during festive periods. However, international brands, particularly those that source and process Basmati rice domestically, present a significant challenge. These brands help bridge supply gaps and generate jobs in India, benefiting Indian cultivators and the economy.

Market Expansion and Government Support

Indian Basmati exporters have expanded their reach to new markets across continents, driven by superior product quality and growing customer demand. Key markets now include Canada, the US, the Middle East, and Central Asia. Indian exporters hold over 90% of the market share in many of these regions, showcasing their dominance.

The Indian government plays a proactive role in supporting Basmati exports. Initiatives like establishing new trade routes and negotiating trade agreements, such as the Free Trade Agreement with the UK, have been crucial. The government’s efforts to mitigate logistical challenges, continental conflicts, and climate-related issues have helped maintain the competitiveness of Indian exporters.

Challenges and Future Outlook

Despite their strong position, Indian exporters face challenges from logistical issues, international conflicts, and climate change. These factors can disrupt supply chains and provide temporary advantages to competitors like Pakistan. However, these challenges are typically addressed promptly through governmental and private sector initiatives.

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Impact on Vidarbha: Vidarbha, known for its extensive orange cultivation over 126,000 hectares, with 78,000 hectares in the Amravati district alone, is heavily affected. Warud and Morshi tehsils in Amravati, covering 43,000 hectares, are major contributors, earning Warud the nickname ‘California of India’.

Production and Concerns: Ramesh Jichkar, CEO of Shramjivi Nagpuri Santra Producers Company Ltd, noted that Vidarbha produces about 800,000 MT of oranges annually across two seasons. He expressed concern over the consistent increase in Bangladesh’s import duties over the past five years, which is harming local farmers and traders.

Call for Government Intervention: The Indo-Bangla Orange Association (IBOA) has sought intervention from the Indian government, as the duty hikes could reduce exports to Bangladesh from 25% to less than 15% of Vidarbha’s total orange production.

Export Decline: The region typically sends around 60 truckloads of oranges daily to Bangladesh during the season, but this number has reportedly halved. Export statistics show a decline from over 141,000 MT in 2020-21 to an anticipated 25,000 MT in 2023-24.

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Thailand’s 5% broken rice dropped to $585 per ton on Thursday, the lowest price since April 25, down from $595 last week. A Bangkok-based trader highlighted that exporters are cautious amid potential changes in Philippine import policy, including possible reductions in import tax.

In Vietnam, 5% broken rice prices were quoted at $575 per ton, slightly down from last week’s $575-$580 range. Trade has slowed as buyers await the anticipated tariff cuts by the Philippines, according to a trader in Ho Chi Minh City. Vietnam exported 650,000 metric tons of rice in June, marking a 5.7% increase compared to the same period last year, government data revealed.

India, the world’s top rice exporter, saw its 5% broken parboiled rice remain stable at $541-$548 per ton this week, unchanged from the previous week. However, African demand has weakened due to rising freight charges, with African buyers becoming increasingly price-sensitive, noted an exporter from Kakinada in southern Andhra Pradesh.

The Baltic Exchange’s main sea freight index reached a near-two-month high this week, exacerbating the cost pressures on African buyers.

Despite Bangladesh approving the import of nearly 2 million tons of rice, no rice has been imported as of April, according to officials from the food ministry. The Bangladeshi government is struggling to control rice prices, which have remained high despite good yields and substantial stock levels.

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This trade relationship, rooted in history, continues to evolve with market conditions and regulatory changes. The UK and USA trade various food products, each country leveraging its agricultural strengths to meet the demands of consumers on both sides of the Atlantic.

From the UK, popular exports to the USA include British whisky and gin, valued at over £1.3 billion in 2022, and snack foods such as chocolate, biscuits, and crisps, which were valued at approximately £200 million in 2021. Additionally, UK cheeses like cheddar and stilton are well-liked in the USA, with cheese exports reaching £94 million in 2022. The UK also exports some meat products, including pork, to the American market, with pork exports valued at £85 million in 2021.

From the USA, the UK imports grains and cereals, including wheat and corn, with grain exports valued at $500 million in 2022. American beef and poultry are also sold in the UK, subject to strict regulations, with meat exports around $450 million in 2022. Nuts and dried fruits, such as almonds and pistachios, are popular imports, valued at $300 million in 2021.

Additionally, American processed foods, including snacks and ready meals, reached $350 million in 2022. The food trade between the UK and the USA is shaped by trade agreements and regulatory standards. After Brexit, the UK has been working on new trade agreements with the USA to replace those from when it was part of the EU.

These agreements aim to reduce tariffs and make trade smoother, with the Trade and Cooperation Agreement (TCA) being one effort to address trade barriers. Both countries have strict food safety standards set by the UK’s Food Standards Agency (FSA) and the USA’s Food and Drug Administration (FDA). The UK’s stricter policies on genetically modified organisms (GMOs) compared to the USA can complicate some imports, and differences in animal welfare and environmental standards also affect trade, requiring alignment of regulations.

Despite these challenges, there are significant opportunities in the food trade between the UK and the USA.

Tariffs and quotas can affect trade costs and volumes, and regulatory differences can create trade barriers, but the growing demand for premium, organic, and specialty food products in both countries presents substantial growth potential. The organic food market in the UK was worth £2.79 billion in 2021, indicating significant growth potential. Collaboration in food technology and innovation can lead to new products and processes, enhancing trade, with the food tech sector in the USA valued at $250 billion in 2022.

Current trends in food marketing, such as the growth of e-commerce and a focus on sustainability, are also shaping the future of food trade between the UK and the USA. E-commerce has transformed food trade, enabling direct-to-consumer sales that bypass traditional retail channels, making it easier for food producers in the UK and the USA to access each other’s markets. Online grocery sales in the UK grew by 76% in 2020 and continue to be a significant market segment. Consumers in both the UK and the USA are increasingly focused on sustainability and ethical sourcing, driving changes in food production, packaging, and marketing, with an emphasis on environmentally friendly practices and transparent supply chains. In 2021, 40% of UK consumers reported they are willing to pay more for sustainably sourced products.

In conclusion, the food trade between the UK and the USA is a vibrant and evolving sector shaped by economic, regulatory, and consumer factors. Both countries benefit from a deepening trade relationship, leveraging their strengths to meet diverse market needs. As new trade agreements are made and regulatory challenges are addressed, the future of this transatlantic food trade looks dynamic and promising.

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Anish Bhansali, managing partner of Bhansali & Co., a prominent exporter to Iran, affirmed the halt in shipments, citing the uncertain geopolitical climate. “We have stopped shipping teas to Iran. The geopolitical situation does not look to die down soon. The shipping companies will be staying away from the region till the situation improves,” stated Bhansali.

Also, Mohit Agarwal, director of Asian Tea Company, expressed disappointment over the disruption in tea exports to the Gulf nation, highlighting the anticipated export volume of orthodox tea for the year. “This year, we were expecting exports of 40–45 million kg of orthodox tea to the Gulf nation. The initial buying of the new season teas by Iran had raised hope for us,” lamented Agarwal.

Gautam Miglani, managing partner of LRNK, a Haryana-based basmati rice exporting firm, echoed sentiments of caution, revealing the decision to put exports on hold amidst the current geopolitical tension. Miglani emphasized the logistical challenges faced by exporters, including reduced ship traffic from Iranian ports and increased waiting times at Indian ports.

Likewise, Miglani noted the reluctance of insurance companies to extend coverage for exports to Iran, exacerbating the uncertainties surrounding rice exports. As a result, the industry has adopted a wait-and-watch approach, refraining from further commitments until the situation stabilizes.

The suspension of exports to West Asia underscores the far-reaching implications of geo-political tensions on India’s agri-commodity trade, with basmati rice exports to Iran alone accounting for a significant portion of India’s total exports in FY24. As exporters navigate the volatile landscape, they remain vigilant, awaiting signs of diplomatic de-escalation to resume trade activities.

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The surge in imports, which is estimated to have surpassed 45 lakh tonnes in the concluded financial year, up from 24.5 lakh tonnes the previous year, underscores the ongoing challenge India faces in maintaining a stable supply of pulses domestically. To address this concern and stabilize prices, the government is actively exploring long-term contracts with new markets such as Brazil and Argentina.

Furthermore, negotiations for importing over 20,000 tonnes of Urad from Brazil and Arhar from Argentina are reportedly in their final stages. Additionally, agreements have been inked with countries like Mozambique, Tanzania, and Myanmar to ensure a steady inflow of pulses into the Indian market.

The recent spike in imports comes amid rising concerns over inflation, particularly in pulses, with March and February witnessing inflation rates of 17% and 19%, respectively. To mitigate this, the government has implemented measures such as imposing stock limits on pulses and urging states to crack down on hoarding activities.

However, despite government incentives and schemes aimed at boosting domestic production, including guaranteed purchases and higher minimum support prices (MSPs), India has witnessed a decline in pulse production over the past few years. The Agriculture Ministry estimates a drop in pulses production from 261 lakh tonnes last year to 234 lakh tonnes in 2023–24.

This decline is attributed to various factors, including erratic climate conditions in key producing regions and a reduction in the pulses sowing area over the last few years. According to experts, the pulses sowing area has decreased by 16% over the past two years, leading to a corresponding decline in production.

The Reserve Bank of India has also highlighted the impact of food price pressures, particularly in pulses, on overall inflation numbers, posing challenges to achieving the target inflation rate of 4%.

Despite being a significant consumer and grower of pulses, India’s escalating reliance on imports underscores the need for comprehensive strategies to enhance domestic production and ensure food security in the long run.

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The Indian Sugar Mills Association (ISMA) had fervently sought permission to export 10 lakh tons of sugar for the ongoing season, citing projections of a healthy closing stock by season-end. However, a senior official from the food ministry disclosed to PTI that the government is currently not entertaining the notion of sugar exports, despite industry pressure.

India’s sugar production has already exceeded 30 million tons as of March in the ongoing season, with ISMA revising its production estimate upward to 32 million tons for 2023–2024. This adjustment surpasses the government’s own projection of 31.5–32 million tons.

Nevertheless, in light of the surplus, the government is contemplating allowing sugar mills to divert excess B-heavy molasses towards ethanol production this year.

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