Agri Business

Non-basmati exports may rebound as India attracts new customers

Vishwanath Kulkarni Bengaluru | Updated on May 08, 2020

Rice shipments, which were disrupted by the Covid pandemic, have resumed at a sluggish pace

Malaysia, Philippines show interest; weak rupee makes country competitive

After almost a 40 per cent decline in shipments during last financial year, India’s non-basmati rice exports are set for a rebound this year on demand from new buyers such as Malaysia and the Philippines, exporters said. Firming prices, coupled with a decline in rupee, is seen aiding the shipments of the cereal.

“The demand from new buyers such as Malaysia and the Philippines should help the recovery in exports this year,” said BV Krishna Rao, President of the Rice Exporters Association.

Non-competitive pricing

The non-basmati rice exports slumped by about 40 per cent to 5-6 million tonnes in 2019-20, according to trade estimates. This decline was mainly on account of higher prices due to the rise in minimum support price (MSP) of paddy that hit the competitiveness of the Indian cereal in overseas market.

Official export figures for 2019-20 are yet to be released by the Agriculture and Processed Foods Exports Development Authority (APEDA), which monitors the non-basmati rice shipments. As per the latest data from APEDA, non-basmati rice exports for April-January 2019-20 period stood at 4.01 million tonnes, about 36 per cent lower than the corresponding period previous year.

Fall in exports

In value terms, non-basmati rice shipments were down 35 per cent at $1.63 billion ($2.50 billion in same period last year). India has been the largest exporter of rice, after the exports of non-basmati rice were allowed from 2011. India, the second largest producer and top exporter of rice, competes with countries such as Thailand and Vietnam in the markets of Africa and Asia.

Though global prices have firmed up in recent months on short supplies in the Asian countries, Indian prices are still competitive, attracting buyers, Rao said. Indian rice prices for parboiled and 5 per cent brokens, which hovered around $375 a quintal in February are quoted at $400-420 per tonne FOB to African countries.

Vietnam prices are in the range of $460-470 and Thai prices around $500. “The weakening of rupee by 7-8 per cent has helped us to be competitive,” Rao said. However, exporters are cautious about the African markets as the slump in oil prices could slacken the demand in some countries.

Shipments resume

Rao said the rice shipments, which were disrupted by the Covid pandemic, have resumed on a sluggish pace.

India’s rice production for 2019-20 is estimated at an all-time high of 117 million tonnes, as per the second advance estimates. Rice stocks with the Food Corporation of India stood at 27.66 million tonnes as on May 4.

Published on May 08, 2020

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