The Hindu Business Line : Rice exporters fault Govt policies, fear loss

THOUGH India is reported to have emerged as the second largest exporter of rice, its hold in the global grains market will primarily depend on the Government's clarity in thought and long-term perspective, trade sources said.

"It is lack of clarity and lack of long-term perspective on the part of the Government that is likely to decide how much headway we can make in the global market," sources in the grains exporting sector told Business Line.

"With the kind of policy that the Government is currently following, we don't think we will be able to make much progress this year," the sources, who did not wish to be identified, said.

The trade, in particular, is worried about the non-availability of rakes for exports and the Government's decision on 100 per cent broken rice.

The Centre has decided not to allow sale of 100 per cent broken rice from its stocks held by Food Corporation of India (FCI).

"We are affected by such decisions on broken rice and not by the periodic hike of rice price for exports by FCI," the sources said.

The decision on broken rice has affected shipments of par-boiled rice the most.

"The Government must allow 100 per cent broken rice against the current decision to sell only 5 per cent brokens. This is especially a must for par-boiled rice. Agreed, some of the traders had played mischief but the entire trade must not be punished for this," the sources said.

In November, the Government raised par-boiled rice price to Rs 6,615 a kg and that of raw rice to Rs 6,260 in the wake of the stocks with FCI declining.

Rice stocks with FCI as on October 1 was 15.77 million tonnes, far higher than the statutory requirement.

"These measures will not help save any grains for the Government. This will only discourage exports and lead to loss through storage and rodents," the sources said.

The Government's policy as well as the price hike have left the Indian rice a little less competitive. In the global cash price market, Indian raw rice five per cent broken is quoted at $185 per tonne f.o.b, while 25 per cent is quoted at $142 a tonne.

In contrast, the Thailand 100 per cent broken is quoted at $198 a tonne and 25 per cent at $183.

Vietnam's five per cent and 25 per cent broken are quoted at $177 and $162 respectively, while Pakistan's 20 per cent and 25 per cent broken rule around $157 and $154 respectively.

The competitiveness of the 25 per cent broken rice has declined by about $10 a tonne after the hike in prices in November.

The non-availability of rakes is also causing problems, according to the sources.

"While FCI does not permit movement of rice for exports by road, non-availability of rakes has emerged as a headache for us. Price is never a big problem for us," the sources said and added that it had affected shipment plans badly.

"During the last six months, we have been paying through our noses to fulfil our commitment. Whatever profit we have earned have been wiped off and, on top of it, consignments are delayed," the sources said.

This has resulted in the global market not taking India as a serious player. "We are not export competitive. We have been raising these issues periodically but without finding a solution," the sources said.

Bug row blows over

THE issue of live insects in a consignment of 10,000 tonnes of rice to the Philippines seems to have blown over.

Last month, the Philippines had complained that it found live insects in one of the consignments sent by India.

It was part of the nearly seven lakh tonnes that Manila will import from India to overcome supply shortage.

"The issue could have been solved by the company concerned itself. Only when there is a problem, it is referred to us," an official source said.

Trade sources said the issue had been settled amicably.

The Philippines authorities, when contacted by e-mail, did not respond.

The PEC or the Project Equipment Corporation — an arm of the Commerce Ministry, won the right to export to the Philippines.

In turn, it has sub-contracted to other exporters to lift the consignment.

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