Basmati rice exports may grow to Rs 22,000-22,500 cr in FY18: ICRA

Resumption of imports by Iran will be keenly watched by the industry as it has the potential to provide an impetus to exports, he added.

"Going forward, the coming financial year is expected to witness better revenue growth supported by a rise in average realisations, as paddy prices firm up during the current procurement season. Moreover, resumption of imports by Iran will also be crucial for driving industry growth in the next fiscal," Jotwani said.

The basmati rice industry witnessed moderation over the last few years on the back of subdued international demand, partly attributable to the delay in resumption of imports by Iran.

However, 2016-17 has seen some stabilisation in demand, ICRA said, adding after peaking at Rs 29,300 crore in FY14, the value of basmati rice exports went on a downward trajectory.

While volumes saw some growth over the last few years, the decline in value is primarily owing to continued pressure on average realisations (declined from a high of Rs 77,988 per tonne in FY14 to Rs 56,149 per tonne in FY16) in the light of moderation in demand in the global market, ICRA said.

Nevertheless, the export volumes in the current fiscal have largely been in line with last year, being supported by the increasing domestic demand for basmati rice, the report added.

It said, the industry has registered milling gains on paddy procured at a fairly low rate in the last procurement season and favourable foreign exchange rate movement.

For the next fiscal, the industry is expected to benefit from the rising paddy prices, ICRA said.

After declining considerably during the procurement season in FY16, basmati paddy prices have firmed up by 20-25 per cent across various varieties, primarily due to the relatively lower production, in the recent procurement season - October to December 2016, the agency noted.