Rising rice. India’s rice exports likely to top last year’s performance

India will likely continue its dominance in the global rice market this fiscal, too, with its competitive offerings. Non-basmati rice exports are likely to exceed last fiscal’s record shipments of 13.08 million tonnes (mt) or at least remain around that level, according to trade and industry experts.

Besides record non-Basmati shipments, India, the world’s largest rice exporter, also exported 4.6 mt of Basmati rice. Totally, rice exports fetched ₹65,297 crore against ₹45,426 crore in 2019-20.

Panic over pandemic

However, realisations from exports could be affected since panic purchases by some countries witnessed last fiscal are missing.

“Our non-Basmati rice exports are doing well. Overall, its shipments could be higher than last year at around 14-15 mt,” said Vinod Kaul, Executive Director, All India Rice Exporters’ Association (AIREA).

“According to the Government's advance estimates, rice exports have increased, primarily due to non-Basmati shipments,” he said.

“Last year, importing countries had purchased due to the panic created by Covid pandemic. Those countries have ample stocks now. Buying could be on a need basis. Importers may opt to buy only if prices are lower,” said a New Delhi-based analyst.

This has resulted in Indian five per cent broken parboiled rice prices dropping by $5-7 ( ₹375-525) a tonne in the last couple of weeks. Currently, Indian five per cent parboiled rice is quoted at $364-368 (₹27,250-27,525) a tonne. Globally, rice prices have dropped to 16-month-low now.

Basmati exports hit

On the other hand, Basmati exports were 15 per cent lower in April and the trend continued in May, Kaul said, adding that the drop was due to container shortage and high ocean freight.

“Our exports to Africa and Bangladesh continue to be good. Our prices are comparatively competitive compared with competitors,” a Mumbai-based trader said.

“We could export about one mt of non-Basmati rice to Bangladesh this year,” the trader said.

Bangladesh, one of the largest importers of Indian non-basmati rice, bought 0.91 mt of rice last fiscal. It was, however, lower than the 1.84 mt it imported in 2017-18.

Bangladesh tenders

“Bangladesh is floating tenders every month to import 50,000 tonnes and Indian firms are getting these as their bids are the lowest,” the trader said. Currently, paddy is being harvested in the neighbouring country, and it has resulted in the Sheikh Hasina Government has slowed issuing tenders.

“Bangladesh traders say their government will begin floating tenders regularly from August,” he said.

In addition, Indian trade could take advantage of a cut in Bangladesh rice import duty to 25 per cent from 62.5 per cent in December last year. Dhaka has also allowed private traders to import one mt of rice which could also help Indian shipments.

“Private traders are not actively importing. It is the government there that is actively importing,” the trader said.

New arrivals

“India exports are helped by the arrival of the new crop in Telangana and Andhra Pradesh. Despite Covid shutdowns, the ports were operational, and railways moved freight in time. This has helped maintain the momentum in exports,” said BV Krishna Rao, President, The Rice Exporters’ Association (TREA).

A Delhi-based multinational export-import official said India exported 7-8 mt of rice annually a few years ago. “But 10 mt has become the new normal now as India has emerged strongly in the global export market,” he said.

According to the official, Thailand is out of the export market as it grapples with its production woes, while Vietnam rice is the costliest. “Myanmar is also out of the market due to the unrest following the coup that took place there earlier this year,” he said.

Offer rates

According to the International Grains Council, Thailand’s five per cent broken white rice is offered at $401 (₹30,000) and Vietnam’s five per cent broken at $395 (₹29,575) a tonne. Trade sources said India is offering 25 per cent broken white rice at $385 (₹28,800).

The official ruled out China importing a higher volume this year. “China has got full access to Myanmar rice. It will buy it from there. Maybe, we will export one or two lots,” the multinational firm official said.

The Mumbai-based trader, however, said China was getting Indian rice indirectly from Vietnam. “Direct exports to China are limited,” he said.

Kaul said non-Basmati rice is exported in break-bulk vessels, while Basmati is only in containers. As a result, the fragrant rice shipments have been affected due to the non-availability of containers and rising ocean freight rates.

High ocean freight

Currently, break-bulk vessels charge $90-100 (₹6,750-7,500) a tonne to African destinations, while containers cost $125-135 (₹9,350-10,100) a tonne. These charges have doubled compared with the pre-Covid period.

All traders and TREA’s Rao said India enjoys an advantage due to its record production in the last two seasons and its granary overflowing with stocks. Last season (July 2020-June 2021), rice output was a record 121.46 mt compared with 118.87 mt the previous year.

As of July 1, the Food Corporation of India (FCI) had 29.68 mt of rice stocks, besides 28.98 mt of paddy that could yield 19.28 mt of rice. During the same period a year ago, FCI had 27.17 mt of rice stocks and 18.28 mt of paddy (12.16 mt rice).