Rice exporters in India see growth in global price

Rice export from India is seen picking up on an expected increase in demand from southeast Asia.

India, currently the world’s largest exporter of rice, has seen a 35 per cent fall in rice exports so far this year, as domestic rates have been higher than that offered by competitors. However, exporters of common variety rice now are hopeful that the supply slump in Thailand due to drought and price increase in Vietnam and Bangladesh—the other major rice producing nations—will turn the market favourable for them.

“The rice exports market holds potential for growth as the crop size is not high in Thailand due to drought this year, whereas prices are rising in Vietnam and Bangladesh,” Rajiv Kumar, executive director, The Rice Exporters’ Association, told ET.

India had exported almost 12 million tonnes of rice (basmati and non-basmati) in 2108-19. Till the third quarter of FY20, the country had exported 6,398,275 tonnes of the commodity, as per data from Agricultural and Processed Food Product Export Development Authority (APEDA).

According to Kumar, after taking into account average domestic rice consumption of about 8 million tonnes every month, India has adequate stock of the commodity to push its export. Every year, the country exports about 12 million tonnes of rice, including the premium basmati variety.

Also, exporters are anticipating Bangladeshi authorities to ban rice export in order to keep domestic prices in check. The nation had extended 15 per cent cash subsidy to rice exporters in February this year as local prices were unviable for exports.

“Bangladesh is expected to curtail export of rice to curtail the rising domestic price of rice,” Ajay Kedia, analyst at Kedia Commodity, said, adding that India’s rice export scenario will brighten as the output has been affected by drought in Thailand and domestic prices have spiked in Bangladesh. He said prices have surged to a one-year-high in Vietnam and it will strengthen the global rice market.

Indian traders are also vying for a larger pie of Africa’s rice market which saw export from China surge last year. “China prefers imports of fresh rice, but it also exports old rice to Africa,” a Tamil Nadu-based rice exporter said. Shipments from China remain affected due to the coronavirus outbreak and the situation is likely to further open the market for other players, he said.

According to Rice Exporters’ Association’s Kumar, global cues are turning favourable for rice export from India though bilateral agreements and preferential treaties limit the potential.

He said Thailand, the largest buyer of rice in the international market, levies a duty of 50 per cent on rice from India, whereas it is 35 per cent in Vietnam. “Global rice export market is based on thin margins and a 15 per cent difference in duty is a substantial disadvantage for India exporters,” said Kumar. Indonesia extends duty exemption of $35 per tonne to Pakistan, which makes Indian rice dear by 11 per cent,” Kumar sai


Leave a Reply