India’s non-basmati rice exports will likely be affected in the first quarter this year as rates of domestic parboiled rice have increased in view of the Union government purchasing the cereal for distribution under the free foodgrains scheme for poor families.

“Parboiled prices are up by $20-30 a tonne (₹1,500-2,225) as there is higher consumption at home. There is also panic buying by the procurement agencies,” said VR Sagar, Director, Bulk Logix.

These purchases are happing in the central parts of the country in regions such as Nagpur and Chattisgarh.

Ensuring ample stocks

Trade sources said the Centre was procuring parboiled in those regions to distribution in Chattisgarh and Bihar. “From Chhattisgarh, it is easy to transport to Bihar,” a trade analyst said, adding that the Centre was keen to ensure ample stocks till 2023 November-December.

The purchases are being made as the Omicron variant of the Coronavirus is spreading fast in the country and the Centre might distribute parboiled rice among the poor in Chhattisgarh and Bihar in view of any lockdown being imposed.

The foodgrain will be distributed under the PM Garib Kalyan Anna Yojana, under which the under-privileged were given free foodgrains in 2020 and last year during the Covid shutdowns.

Pace of export continues

But for this, exports of non-basmati rice, particularly white, are continuing in the same vein as witnessed during the past two years. “As usual, rice exports are maintaining the same tempo,” said BV Krishna Rao, President, The Rice Exporters Association (TREA).

Exporters said Indian rice exports face the problem of price pressure from competing nations such as Vietnam, Thailand, Myanmar and Pakistan. According to the International Grains Council, Indian rice prices are ruling 10 per cent lower year-on-year, while Thailand and Vietnam are down over 20 per cent.

Indian 25 per cent broken white rice is quoted at $360, while parboiled is ruling at $375. In comparison, Thailand’s five per cent broken white rice is quoted at $398 and Vietnam’s rice of the same grade at $390.

Competition from Myanmar

“We are observing a tough fight from Myanmar which we did not witness past two years,” said Rao. “Even Malaysia is buying from Pakistan but we expect them to turn to India once Islamabad cereals prices top $400.”

Vietnam and Indonesia were not looking at India for their rice requirement, he said, adding that India’s 100 per cent broken rice, however, faces no competition in the global market.

The 100 per cent broken rice is mainly preferred by China, which uses the foodgrain as cattle feed. “China continues to buy the 100 per cent broken from us,” said Bulk Logix’s Sagar.

Barring the first quarter, rice exports should be doing well in the other three quarters, he said.

Africa’s favourite

Africa continues to prefer Indian rice. Only if Vietnam and Thailand cut their prices sharply, India’s dominance would be under threat, Rao and Sagar said.

On the other hand, tight container availability continues, while breakbulk freight prices have dropped only a tad.

Sagar said India’s rice exports will be stable this year, while Rao said they could be around 16 million tonnes.

India’s rice exports have fared well during 2020 and 2021. Shipments of the cereals which were 5.04 million tonnes during 2019-20 surged to 13.09 mt in 2020-21. In the first seven months of the current fiscal, rice exports totalled 9.63 mt.

Shipments of the cereal have also been aided by record crops during these years. In 2019-20, the production was 118.87 mt and in 2020-21, it was 122.27 mt. For the current season to June, Kharif rice production has been estimated at 107.04 mt - another record high.