Govt hopeful of resolving Iran’s currency issue by next month

As India’s export of commodities like sugar to Iran has been hit due to Tehran’s rupee reserves shortage with Indian banks, the government on Wednesday said the two nations are negotiating for the use of other currencies for bilateral trade and is hopeful of resolving the matter by next month.

Iran’s rupee reserves have reduced significantly in India’s UCO and IDBI Bank
, the two banks authorised to facilitate rupee trade. As a result, exports of agri-commodities like sugar, tea and rice have almost stopped because exporters are not sure of getting paid on time.

“Our negotiations with Iran are on. The Ministry of External Affairs is negotiating. We hope to see a breakthrough soon. …We are trying to resolve this by April,” Food Secretary Sudhanshu Pandey told.

Iran still has some quantity of other currencies.

The two countries are discussing to allow any other currency that banks can accept for bilateral trade, he said.

Asked when sugar export from India will resume, the secretary said the issue will hopefully get resolved by April, and thereafter the shipments can take place.

Iran needs sugar. It imports sugar from India as prices are better and transportation cost is less, he said.

During last year, Iran had imported 11 lakh tonnes of sugar from India, which is one-sixth of the country’s total exports, he added.

On India’s sugar export quota fixed at 6 million tonne for the current 2020-21 marketing year (October-September), the secretary made it clear that the quota remains the same and there is no question of increasing it.

“There is confusion if export quota will be increased or not. 6 million tonne is the quota for this year. For next year’s quota, we will not make a decision now,” he said.

The decision on fixing an export quota for the 2021-22 marketing year will be determined based on the area sown under sugarcane crop and production estimates, he said.

He further said India has contracted 4.3 million tonne of sugar export so far this year. Of which, about 2.1 million tonne have left sugar mills. Almost 1.63 million tonne have been despatched from ports.

“We are on target,” he added.

India is the world’s second-largest sugar-producing country after Brazil with a production estimate of 31 million tonne for the 2020-21 marketing year

Source » economictimes.indiatimes

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