Resurgent rice. India may corner nearly half of global rice trade as exports soar to record

India could account for as much as 45 per cent of global rice exports in 2021 as expanded port-handling capacity allows the world’s second largest rice grower after China to ship record volumes to buyers across Africa and Asia.

The world’s top exporter could ship as much as 22 million tonnes (mt) of rice this year, or more than the combined exports of the next three largest exporters Thailand, Vietnam and Pakistan, said Nitin Gupta, Vice President of Olam India’s rice business.

“Along with traditional buyers, this year China, Vietnam and Bangladesh are also making purchases from India,” he said.

India’s exports in 2020 jumped 49 per cent from the year before to a record 14.7 mt , as shipments of non-basmati rice spiked 77 per cent to a record 9.7 mt.

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In 2021, non-basmati rice shipments could nearly double from a year ago to 18 mt, while premium basmati rice exports are seen steady at 4 mt, Gupta said. The US Department of Agriculture projects global rice exports of 48.5 mt in the 2021-22 season.

Logistical bottleneck

Indian rice has been consistently cheaper than supplies from Thailand and Vietnam since last March, while global demand for rice has scaled record highs. However, limited infrastructure at Kakinada Anchorage, India’s main rice port, led to persistent congestion and lengthy loading delays last year, prompting some buyers to switch suppliers.

FILE PHOTO: Children play with a ball after rice is spread for drying at a rice mill on the outskirts of Kolkata

India was offering a discount of more than $100 per tonne over other exporters, but much of the discount was wiped out by higher demurrage charges tied to the delays, says exporter Brahmananda Gudimetla. To ease the congestion, the southern State of Andhra Pradeshin February allowed the use of an adjoining deepwater port at Kakinada for rice shipments.

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“Vessel waiting period has gone down after the deep waterport started handling rice. Demand that could have shifted to other countries remained with us,” said BV Krishna Rao, President of the Rice Exporters Association of India.

India exported 12.84 mt of rice in the first seven months of 2021, up 65 per cent from a year ago, according to provisional data from the commerce ministry. “At least 1 mt of rice would be shipped from the deepwater port in 2021,” said M Muralidhar, Chief Operating Officer of Kakinada Seaports Ltd.

Shipping shakeup

Despite extra port capacity, Kakinada’s loading rate still lags well behind Southeast Asian ports due to a lack of dedicated rice-handling infrastructure.

“Here in Kakinada, it takes nearly a month to load around 33,000 tonnes of rice from the time we drop the anchor. In Thailand it takes only 11 days for the same quantity,” says Fahim Shamsi, captain of a ship that was loading rice at Kakinada this month.

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“Strain on the Kakinda port has increased after the cost of shipping rice by container surged, forcing rice shippers toswitch from containers to bulk vessels,” said Gupta of Olam.

“Kakinada can export an additional 2 mt of rice if infrastructure was upgraded and the process mechanised,” Rao said. India’s exports of non-basmati rice go mainly to African and Asian countries, while premium basmati rice goes to the Middle East, the United States and Britain.

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