Moneycontrol PRO
Upcoming Webinar:Prashant Shah explains ‘Irrelevance of Bull & Bear Markets for Success in Technical Analysis’. Register For Free!

India’s Jan-Oct rice exports higher than all of last year’s shipments

According to the Ministry of Commerce, non-basmati rice exports grew 112 percent in October. During April-September, non-Basmati exports more than doubled, according to a Commerce Ministry official.

November 04, 2020 / 05:21 PM IST

Indian non-basmati rice exports during the January-October period in 2020 have exceeded the shipments made in all of the previous year on favourable conditions and production problems in competing nations such as Thailand.

“We have exported close to six million tonnes of non-basmati rice so far this year. We exported only around 5.1 million tonnes the whole of last year,” said Rice Exporters Association (REA) President BV Krishna Rao.

According to the Ministry of Commerce, non-basmati rice exports grew 112 percent in October. During April-September this year, non-basmati exports more than doubled, media reports quoted a commerce ministry official as saying.

Conditions have been favourable for Indian rice exports. The Food Corporation of India (FCI) had good stocks, the crop size has been good and the onset of novel Coronavirus has seen demand surging from other countries.

“Other competing countries were not geared up for the supply, while Vietnam banned exports. India has taken advantage and it has offered rice at a competitive price, resulting in the shipment of good volumes,” said Nitin Gupta, Vice-President, Olam Agro India Ltd.

Close

In April, when demand for exports picked up, FCI had 32.24 million tonnes in its warehouses besides unmilled paddy of 25.24 million tonnes, which could yield 16.91 million tonnes of rice.

FCI rice stocks since then dropped to 22.19 million tonnes, while it had 10.97 million tonnes of paddy stocks that could yield 7.3 million tonnes of rice. In addition, the Union government procured 21.05 million tonnes of paddy that can yield another 14.1 million tonnes of rice.

The procurement has to a great extent helped common grade paddy prices to rule at the minimum support price level of Rs 1,888 a quintal in almost all terminal markets in India.

“Other countries did not have the stocks to export. Thailand was hit by drought resulting in a lower crop. Vietnam had crop only to meet the Philippines’ demand and China stopped dumping its rice in Africa,” said Rao.

These resulted in a double impact where a seller turned buyer, thus helping Indian exports.

“Normally, around five lakh tonnes of non-Basmati rice are exported every month. This year, India has been exporting seven to eight lakh tonnes a month,” said Gupta.

At $375 (approximately Rs 28,000) a tonne free-on-board (f.o.b.), Indian par-boiled rice has been competitive in the global market. In comparison, Thailand, India’s primary competitor, is offering it at least $100 a tonne (Rs 7,500) more.

Raw or white rice 5 percent broken from India is quoted at $350-360 f.o.b. for (Rs 26,100-Rs 26,900) compared with Thailand’s offer at $472 f.o.b. (Rs 35,250). Vietnam is offering the same grade at around $465 f.o.b. (Rs 34,750).

West Asian countries, particularly those in the Gulf, and North African nations such as Senegal and Benin are main buyers of Indian rice. While Gulf nations buy the fragrant and premium basmati rice, the African nations buy non-basmati par-boiled rice.

“India rice goes to 170 countries in the world. This has resulted in global prices for rice increasing by 50 percent. We have also been blessed by a good Kharif crop,” said REA’s Rao, adding that the depreciation of the rupee against the dollar has also helped.

According to the first advance estimate of foodgrain production for 2020-21 released by the Ministry of Agriculture, Kharif rice production has been estimated at 102.36 million tonnes against 101.98 million tonnes last year.

Including 16.45 million tonnes produced during the Rabi season, India’s rice production last year was a record 118.43 million tonnes.

Olam’s Gupta said India, the world’s number biggest rice exporter, would continue to do well. “This year, our gap with Thailand’s rice exports will widen,” he said.

Non-basmati rice exports could be nearly 10 million tonnes by the year-end and along with basmati shipments, total rice exports could top 14 million tonnes, Gupta said.

Thailand’s exports could be the lowest in two decades at around 6.5 million tonnes, according to trade estimates.

Gupta said demand for basmati was good and there was panic buying in the domestic and overseas market.

“Demand has tapered down now as Iran has stopped buying. Domestic demand, too, has been affected due to the closure of hotels and restaurants,” he said.

With the Indian government easing lockdown restrictions imposed to tackle the Coronavirus pandemic, domestic Basmati is expected to pick up, particularly with prices easing.

Most of the trades in basmati paddy are currently taking place around Rs 2,500-2,700 a quintal, a tad higher than the same period a year ago.

Basmati production is estimated to be eight million tonnes this year against 7.5 million tonnes last year as the acreage under the crop increased.

(Subramani Ra Mancombu is a journalist based in Chennai, who writes on topics in commodities and agriculture)
Subramani Mancombu
first published: Nov 4, 2020 05:21 pm

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark