Basmati rice exports from India to the Gulf region account for three-quarters of total Indian rice exports
India and Saudi Arabia are understood to have amicably sorted out contentious issues related to the latter’s decision to subject imported food items to mandatory quality checks by bringing in guidelines on maximum residual level (MRL) of pesticides in food items imported into the country.
The breakthrough came about after India sent a high-level delegation to Riyadh last week to hold discussions with the Saudi Food and Drug Authority (SFDA) over the proposed guidelines to be followed on the maximum level of pesticide residues allowed in food items, especially in rice, according to Government and industry sources.
According to official sources, SFDA officials conveyed to the Indian side its decision to frame its own guidelines on MRL, “keeping the human safety aspect as its basic criteria”.
“We are very happy with the outcome of our discussions with the SFDA and we really thank them for their understanding of our genuine concerns on the issue,” Vijay Setia, president of the All India Rice Exporters Association (AIREA), told Arabian Business.
Setia was part of the Indian delegation which was headed by a senior official of the Agricultural and Processed Food Products Export Development (APEDA), a Government body under the central commerce ministry.
SFDA is expected to frame its guidelines on MRL on pesticides and fungicides in 4-5 months, Setia said. The Saudi authorities would study the guidelines set by other countries including Japan before finalising their own guidelines, which are not expected to be as stringent as that of the EU or the US.
The SFDA decision will come as a major relief to India’s rice industry, as there was serious apprehension in India whether the Saudi authorities would follow the stringent European Union (EU) or the US guidelines on the MRL for food products, instead of coming up with its own guidelines.
Saudi government authorities had decided earlier this year to subject import of food items such as Basmati and non-Basmati rice, buffalo meat and a few other food items for the quality check to test for pesticide residue levels in them.
However, in the absence of clear cut guidelines on MRL by the SFDA, customs authorities in Saudi were often applying the highly stringent EU and US guidelines on rice export consignments from India, leading to cancellation of several export consignments, according to top honchos of leading rice-producing companies. Besides, the fees for testing and quality certification for consignments were adding to the overall cost for Indian exporters, making rice exports to Saudi less remunerative.
The situation has led to a significant fall in the export of rice, especially the high-value Basmati rice from India to Saudi since mid this year. Annual rice exports to Saudi alone were in the region of 7-8 lakh tonnes.
Basmati rice exports from India to the GCC region were to the tune of about 3 million tonnes in 2017-18, accounting for three-quarters of total Indian rice exports. In value terms, total Basmati rice exports from India was about Rs 26,000 crore (approx $3.6 billion) in FY18.
Indian rice exporters feel that both the US and EU guidelines are actually ‘non-tariff’ restrictions as their norms on MRL do not confirm to medical facts or toxicology records. In fact, Setia pointed out that the MRL guidelines by EU and the US are not only fixed in an arbitrary manner but in fact are contradictory in the cases of some of the pesticides and fungicides.