Iran increases import duty on rice to 90 percent

In an attempt to prevent more import of rice, Iran has increased import duty on the product from 45 percent to 90 percent hurting rice exports from India and Pakistan. Pakistan, which had already lost major share of the foreign market to India due to stiff competition with the cheaper product of Delhi, would be losing further after the fresh move of Tehran, sources told Business Recorder.

In a letter No 6(3)/208-CS sent recently, Commercial Section of Pakistan Embassy in Tehran has informed the Ministry of Commerce according to a media report published in Iranian newspaper, the government of Iran has increased import duty on rice from 45 percent to 90 percent from July 1. The Commercial Section Tehran has also requested that Iranian Embassy in Islamabad may be approached in order to know the authenticity of the news published in local newspaper as local Iranian authorities were reluctant to respond to such queries of commercial Section.

The Ministry, later as requested by Commercial Section Tehran, has also consulted Foreign Office to approach Iranian Embassy in Islamabad regarding whether there was any change in import policy of Government of Iran. However, Pakistani exporters of rice have confirmed that the import duty has been enhanced by 90 percent by the foreign country which could definitely cause damages to export to Iran. They, however, said that the losses to Pakistani exporters would comparatively lesser as compared to other rice exporting countries like India because Pakistan had already lost major share of exports in the neighbouring country”s market. “Pakistan has already lost Iranian market to India as our commercial banks are already reluctant to accept letter of credits (LCs) and other trade related transactions with Iranian banks. On the other hand Indian banks are facilitating their exporters who do business with buyers/importers from Iran,” they claimed. The other reason of fall in exports to Iran was the stiff competition with Indian rice, comparatively cheaper in international market. India is the only major competitor for Pakisttan in Tehran”s rice market.

However, sources believed, the quantity of legal/ illegal imports of rice by Afghanistan were also increasing because of the smuggling of the same products to Iran. A large quantity of the product was being re-exported or smuggled from Afghanistan to Central Asian and Iranian markets. According to sources, Iran makes changes in duty as per needs of the country to protect local prices of the commodity especially in the wake of increased domestic rice production. There was no ban on trade, but fresh move was just a strategy that many countries use to protect their local markets and it would be reviewed. According to a report the main products of Pakistan which are imported to Iran are rice, fruits/vegetables, cotton and synthetic fabrics, readymade garments, surgical and sports goods. Iran”s annual import requirement of rice of 0.8-1/0 million metric tons was mainly imported from Pakistan, India, Vietnam and Uruguay, it said, adding the better quality rice ie basmati and Sehla was imported from Pakistan, which exports almost 88 percent of its total rice exports to the host country.

Copyright Business Recorder, 2012

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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