Basmati rice export to Saudi Arabia set to decline due to new rules of Food Safety Management System (FSMS). Only rice mills registered under FSMS can export to Saudi Arabia and merchants need to procure from FSMS units only. New rules pertaining the food safety have significantly contributed to the decline of export from India to Saudi Arabia. India’s basmati rice export reduced below 20% in fiscal year 2018-19 against 26% in 2014-15.
The stringent rules comprised of compulsory test reports on Minimum Residue Levels (MRL), DNA test proving authenticity, along with conformity certificate (COC) from Indian exporters. Additionally, a new policy restricted the export of Rice only to exporters who have adopted the Food Safety Management System (FSMS).
FSMS: Food Safety Management System
FSMS encompasses the two most specific quality specifications in the food sector. One is based on ISO 22000 and another is Hazard Analysis and Critical Control Points (HACCP). Supporting this, Merchants are advised to provide a certificate from the rice source following Good Agricultural Practices (GAP). Saudi Arabia-Intertek and TUV Austria authorised guidelines for import of basmati rice to Saudi Arabia.
Decline: A Consequence of New SFDA Rules
Saudi Arabia is a major export market for Indian basmati rice, accounting for 20% of the country’s annual exports of 4-4.5 million tonnes. Thus, a slight reduction would hinder the fate of 70,000- 90,000 tonnes of rice exported per month. Further obtaining COC is not easy and cost-effective, hence all exporters may not be able to meet the requirements.
Temporary Sigh of Relief
The shipments of rice to Saudi Arabia to remain unaffected by pesticides, DNA testing and COC until December 31st 2019. However, Indian rice exporters must provide an affidavit undertaking that the shipment sent after September 1, 2019, will submit COC ontime.
An attempt to obtain clarity and refuel the trade.
Government officials may visit Saudi Arabia, attempting to foyer a consent to export rice without the new rules. Alongside a note to Agricultural and Processed Food Products exports Development Authority (APEDA) officials discussing the issues and its negative impact on Indian trade. While seeking clarity on which pesticide to be tested along with an acknowledgment from APEDA is pending.