Basmati rice exporters are gearing up to tap the market in China, which has recently decided to allow imports from India. Exporters believe it may take a couple of years to develop this new market, which largely consumes the glutinous sticky rice.
“It will take a while for us to develop this market. So far, there have been no orders from China,” said Mr Vijay Setia, President, All India Rice Exporters Association. A formal system is being set up to facilitate the Indian rice exports.
China has been importing aromatic basmati from Pakistan in small quantities. However, the Chinese prefer the fragrant, glutinous and sticky Jasmine rice from Thailand and Vietnam. The Thai Jasmine rice is relatively cheaper than basmati. China with a population of over 1.3 billion presents a big opportunity, believe Indian exporters. However, they don't have any estimates of Chinese market size.
“There is a huge market potential,” said Mr Anil Mittal, CMD of KRBL Ltd, the country's largest basmati exporter under the India Gate brand. “We are in talks with the Chinese buyers and hope to do export about 200-300 tonnes in the current financial year,” Mr Mittal said.
New market
China presents a new market for Indian exporters, who have seen a surge in basmati volumes in recent years despite hiccups in key markets like Iran due to the payment issues. India's basmati exports in 2011-12 were projected to be around 2.5 million tonnes, a growth of about 15 per cent over previous year's 2.18 million tonnes.
“It's a great thing that China has allowed Indian imports. Even if we get a one per cent market share, it will be good,” said Mr Gurnam Arora, Joint Managing Director of Kohinoor Foods Ltd. “However, we need to carry out major promotional drive in China,” Mr Arora said.
Prices high
The price of basmati rice, which flared up during the year-end March, continues to rule high on the news of China allowing Indian imports. However, the trading volumes are still small as the build-up in prices is largely seen as speculative in nature, trade sources said.