A sharp decline in crude oil price coupled with a fall in currency in the violence-hit Nigeria has made the Indian non-basmati rice exporters turn cautious. As a result, shipments to the African nation have slowed in the recent past. Indian exporters are keenly watching the forthcoming presidential elections on March 28, after which they expect shipments to pick up.
Nigeria, where insurgency in the form of Boko Haram is on the rise triggering violence in the recent past, is one of the largest buyers of par-boiled rice. Indian exports account for close to half of the 2.5 million tonnes that the African nation imports. Nigeria accounts for close to a fourth of India’s non-basmati rice shipments. Thailand is the other major exporter of rice to Nigeria.
Slow exports“Shipments are slow in the first half and it is a kind of uncertain situation. There is distress in the market as developments in Nigeria are influencing prices. We expect shipments to pick up once the elections are over,” said BV Krishna Rao, Managing Director of Pattabhi Agro Foods Pvt Ltd, a large exporter.
Rao said the non-basmati rice exports to Nigeria are estimated at around a lakh tonnes so far this calendar year, against about 2-3 lakh tonnes in corresponding period a year ago.
Grains trade analyst Tejinder Narang said the biggest problem being faced by Nigeria is the fall in crude oil prices and a huge depreciation in the currency. Nigerian Niara has depreciated by 25-30 per cent in the last few months. Also, the availability of foreign exchange is an issue for the traders. These issues coupled with the delayed elections and politics associated with it have slowed rice exports, Narang said.
However, S Venkatesh, Head-Rice Desk at Ruchi Soya Industries Ltd, sought to downplay the slowdown in shipments to Nigeria.
“Their currency has depreciated by about 25 per cent and oil prices are down. But rice, the cheapest cereal, is what they cannot avoid,” Venkatesh said, adding that there was a general slowdown in offtake.
He said the main issue was the forthcoming presidential elections after which shipments could pick up.
Global competitionRao said Indian exporters have not faced any payment issues so far in Nigeria. India this year is facing stiff competition from Thailand, which is dumping the old cargo in market, while Vietnam has turned aggressive, Rao said.
According to Apeda, non-basmati rice shipments have increased 14 per cent in rupee terms at ₹16,670 crore for the April-January period of the current financial year against ₹14,614 crore in the year-ago period.
In quantity terms, shipments for the April-January period stood at 6.64 million tonnes against 5.87 million tonnes.
In the same period, basmati shipments, impacted by a ban imposed by the largest buyer Iran, were down by about 3.28 per cent valued at ₹22,740 crore against ₹23,510 crore in corresponding last year.