The Hindu Business Line : Rice exports likely to remain dormant

RICE exports from the country are likely to remain on a low key on lower buffer stocks and inadequate availability of railway wagons. This is despite Vietnam, a key competitor to India, running out of stocks till February and Pakistan, another trade rival, facing problems in exporting the foodgrain.

``The surplus, once the kharif crop comes in, will be 2-4 million tonnes (mt). But it is nothing great. Given the current buffer stock situation, the Government may not allow resumption of rice exports,'' trading sources told Business Line.

The Government has suspended allocation of rice for exports from August on non-availability of railway wagons. Buffer or statutory stocks that should be with the Food Corporation of India (FCI) to meet any emergency food situation have also declined to 5.24 mt against the stipulated 6.5 mt.

The Government has said it would review its decision to resume rice allocation for exports towards January-end, when a clear situation on stocks is expected to be available. Lower production last year and rising exports since 2001, when the Government began allocating rice with FCI to cut overflowing warehouses, have led to fall in buffer stocks.

Since then, over 6 mt of rice have been exported with around 4.2 mt being shipped in 2002 alone. It made India, the second largest rice exporter pipping Vietnam. However, Hanoi is expected to regain the position this year.

Since the fourth quarter of 2001, India has found new markets for rice in West and North Africa. It also resumed rice exports to South-East Asia, especially the Philippines.

During kharif, rice production is estimated to have bounced back to 75 mt from 66.51 mt last year.

``There is a window open for our exports. We can fill the immediate gap that will be available till February. But the question is do we have stocks?'' the sources said.

Currently, the Asian rice market is witnessing a firm trend with 25 per cent broken rising by over $10 (Rs 455) a tonne from some destinations. In the global cash market, Thai 100 per cent white rice is quoted at a firm $205 (Rs 9,300) a tonne. Indian white rice 25 per cent broken is currentlyis unavailable no quotes are being offered for it. However, the 5 per cent broken is quoted at $195 (Rs 8,900). Pakistani 25 per cent broken is quoting at $192 (Rs 8,750), while Vietnam 25 per cent broken is ruling at $180 (Rs 8,200) and 5 per cent broken at $197 (Rs 8,975).

``Vietnam's new crop is due only in February. Pakistan's crop is lower than expected. At the current rates at which the Government allocates rice for exports, we can sell it at $183 (about Rs 8,350) a tonne f.o.b., which is on par with the prices that Thailand offers'' the sources said.

``But if we have to be really competitive, the Government will have to roll back the proposed hike in the offer price from January 1,'' they said.

From January 1, the Government has increased the price of white rice for exports to Rs 7,600 a tonne and that of par-boiled rice to Rs 7,800 a tonne.

``But one big problem will be availability of railway wagons. Even now, 1.9 mt of wheat and 30 lakh tonnes of rice are pending delivery with FCI,'' the sources said. The deliveries are pending since August, according to them. ``Wheat is just not moving from Punjab. We are surprised at the shortage of wagons. We did not have such a problem in 2001 when we did very well,'' the sources said.

Official sources said they were keenly watching the progress in rabi sowing too.

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