Two Indian firms have bagged global tenders floated by Bangladesh to import one lakh tonnes of parboiled non-Basmati rice to overcome supply shortage and surge in rice prices.
“Two Indian firms have won the Bangladesh rice import tenders. While one firm has bagged the first tender, agreeing to sell 50,000 tonnes rice at $405 a tonne, the other firm will offer another 50,000 tonnes at $416,” said Rice Exporters Association (REA) President B V Krishna Rao.
Bangla Tribune reported that the Sheikh Hasina Wazed Government’s Cabinet Committee on Government Purchase had last week cleared the purchase through the global tender costing $20.21 million.
India’s Rika Global Impex Limited will supply the rice at $404.35, whose per kg landed cost would be Rs 30, with 30,000 tonnes being delivered at Mongla port and the rest at Chittagong.
Bangladesh floated two separate tenders on November 16 and 25 to import 50,000 tonnes each of parboiled rice on cost, insurance, freight terms besides unloading costs.
The rice has to be delivered in 40 days from the day of signing the contract. Bangladesh plans to import at least three lakh tonnes of rice and India is seen having an edge to bag the entire deal.
“There has been intense competition within India to win the Bangladesh tender. That’s why it has got at these rates. Otherwise, our exports could have easily fetched $450 a tonne,” Rao said.
Bangladesh rice tender and Chinese import of Indian rice have pushed up export prices.
“Par-boiled rice prices are now around $400 a tonne. White rice prices have increased to $375-385 a tonne. We are still 50-60 per cent cheaper than origins such as Thailand and Vietnam,” the REA president said.
In the global market, these purchases have pushed rice prices to a three-month high.
For the first time in three decades, China has begun buying Indian rice. So far, one lakh tonnes have been shipped out of the country.
“Some cargoes are yet to reach the Chinese ports,” Rao said when asked if further orders were on cards.
However, the Chinese have settled to buy 100 percent broken white rice, which is priced lower. Most of the export deals to China have been done at $300-320 a tonne.
At least three exporter-traders said that the 100 percent broken rice could be used for making porridge or starch or animal feed.
“Chinese COSCO Group, which is like our Food Corporation of India (FCI), has not made its intentions clear on further purchases from India,” a trader-exporter said.
A trade expert based in Malaysia said that India was always competitive in the 100 percent broken category, pointing to India making up 60-70 percent of such imports by Senegal. “It imports at least 10 lakh tonnes every year,” the expert, who did not wish to be identified, said.
All India Rice Exporters Association former president Vijay Setia said that India had become very competitive in the global rice market as it had a surplus. “Drought in Vietnam and Thailand had affected production in both countries. It has benefitted India,” he said.
India’s non-basmati exports have also been aided by huge stocks and projections of a record Kharif paddy production.
In April, when demand for rice exports increased, the 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.
By October 1, FCI rice stocks had dropped to 22.19 million tonnes, while it had 10.94 million tonnes of paddy stocks that could yield 7.3 million tonnes of rice.
Additionally, the FCI has procured 39.08 million tonnes of paddy from farmers across the country, which when milled can yield 26.16 million tonnes of rice.
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.
Agricultural and Processed Food Exports Development Authority data showed that non-basmati rice exports more than doubled during April-September this year to 50.79 lakh tonnes against 24.96 lakh tonnes in the year-ago period.
Earlier this month, the Commerce Ministry said that rice exports had increased by about 25 per cent during the April-November period of the current fiscal.
Rice exporters say that non-Basmati exports have already topped last fiscal’s total exports and India, largest rice exporter in the world, could widen the gap this year with the second-largest exporter Thailand.
The US Department of Agriculture's World Agricultural Supply and Demand Estimate (WASDE) report said the pace of Indian rice exports has remained robust since August this year and India could export 13.50 million tonnes in the season ending June next year.
The WASDE exports estimates are one million tonnes higher than the one made last month.
(Subramani Ra Mancombu is a journalist based in Chennai, who writes on topics in commodities and agriculture)Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.