India's basmati rice export to US to take a hit?

It is probably a decision that will affect Indias exports. Dealing a heavy blow to exporters of the
famed Indian basmati rice, the U.S. has made it mandatory to register with the National Plant
Protection Organisation (NPPO). This when GI tag was approved for basmati rice of 7 Indian states.
While the registration has been on-going for the past 3 years, APEDA has issued a warning stating
that U.S. will only import basmati rice from rice mills/processing units registered with the NPPO
starting this April 1st. The rice mills/processing units will be audited by NPPO before being issued the
export certificate.
An advisory has been circulated to all the authorities by APEDA to issue phytosanitary certificate for
rice exports to the U.S. only to registered rice mills/processing units.
The APEDA directive issued is important coming in the wake of Indian basmati rice consignments
being rejected by the United States phytosanitary authority in the past. Making matters worse,
cabinet beetle was detected in basmati rice consignments of Indian origin between 2011-12. Since
when the U.S. decided to monitor the quality of basmati rice consignments from India more strictly.
Sources from the trade industry revealed that 10-15% per cent of consignments get rejected every
year.

This is perhaps an attempt to regulate the market as consignments shipped to the US develop
some issues related to pests or any other things. Mandatory registration with NPPO will filter out
opportunistic exporters, while genuine ones would continue. This will help control the rate of
rejection of consignments also, said Gurnam Arora, joint managing director of Kohinoor Foods, the
producer and exporter of Kohinoor brand of basmati rice.
Arora plays down the impact the new rule will have on Indias basmati exports to the U.S. He
believes that the exports will decline, only marginally, as opportunistic exporters will be eliminated
from the system.
APEDA also seems to be in agreement with Aroras outlook. Around 95 per cent of exporters have
already got registered with NPPO with basmati rice shipment happening in very organised manner.
Therefore, it his highly unlikely there will be any impact in terms of basmati rice exports to the US
with 10 per variation being common, said an APEDA official.
Around 100,000 tonnes of basmati rice worth about $140 million is exported from India to the U.S.
every year. The most powerful economy in the world is an important market for India. It in fact,
constitutes for about 5% of the Indias basmati exports. That is about 3.7 million tonnes to the tune
of $4.5 billion.

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