The Indian diaspora in the United States need not press the panic button. The current stocks of Sona Masuri rice there will likely last for at least 3-6 months. Sources in the rice export business said US rice traders would have at least 12,000 tonnes of Sona Masuri stocked up and another 18,000 tonnes of rice is on its way. The stocks can last for at least six months.
“Sona Masuri is mostly consumed by the South Indians. And unlike in India, they don’t have it for both meals. The US market requires about 6,000 tonnes of Sona Masuri a month. The NRIs need not panic,” G Nagender, President of the Telangana State Rice Millers Association, told businessline.
Triggering panic
The Indian government’s decision to ban the export of non-basmati white rice on June 20 triggered a panic among NRIs, who thronged the local stores to stock up on their staple cereal. Though rice from other countries is available in retail outlets, South Indians living in the US are hooked to Sona Masuri rice.
The Indian government’s decision to ban white rice shipments came after tardy progress in the sowing of paddy. Though the acreage has turned positive, the Centre is wary about the damage caused by floods in rice-growing regions and loss of yield in other States due to late sowing.
Rice exporters are confident that the Centre will soon review its decision keeping in mind the needs of the Indian diaspora. Seeing a huge rush, several grocery and retail chains have increased the prices of rice by up to three times. A 9-kg bag, which used to cost $15-18, is being sold at $46.
“There are enough stocks available. This problem will not continue for long,” Kiran Kumar Pola, Director of Deccan Grainz India, a rice exporter from Hyderabad, said. Trade sources say the ban may not last for over six months.
Stating that it is a staple food for the Indian diaspora, Kiran appealed to the Union Government to exempt Sona Masuri rice from the export ban, keeping in view the concerns.
Additional stocks
A source from the milling industry said India is not the only source that supplies Sona Masuri to the US. “Some traders export rice to the Gulf to tap opportunities from the free trade zones there. The traders there, in turn, sell it to the US market. So, the expats can expect additional arrivals from those countries as well,” he said.
Meanwhile, groceries and retail outlets have started rationing rice sales to the NRIs. “They are selling only one bag to one family. They are displaying notices, saying only-one-bag-per-family,” Ismail Suhail Penukonda, a medical doctor, has said.
Meanwhile, Thailand and Vietnam rice prices have increased by at least $30 a tonne since the ban. However, trade has been muted since most traders are on a “wait and watch mode”.
Thailand Rice Exporters Association President Chookiat Ophaswongse was quoted by Bangkok Post as saying the ban will likely prompt Thai rice mills and exporters to delay rice purchase orders in order to evaluate the impact, particularly since India was the largest exporter with a 40 per cent share in the market.
The ban will impact pricing of different varieties for which purchase contracts are still pending, he said, stressing the need to hold off until a clear price trend emerges.
According to the Thai Rice Exporters Association, prices of 5 per cent broken white rice have increased to $572 a tonne from $534 before the ban. Similarly, 25 per cent broken rice prices have increased to $547 from $512. Prices of 5 per cent broken Vietnam white rice have increased to $543-47 from $498-502, while the 25 per cent broken white rice has surged to $523-27 from $478-82.
With inputs from Subramani Ra Mancombu, Chennai