Located in Asia, India is the world’s largest exporter of Rice in the world and accounts for almost 40% of rice shipments worldwide. In context to the global market, Thailand, Pakistan, China, Myanmar, Vietnam, Burma and the United States are the major rice export competitors of India.
Around 150 countries around the world import rice from India. Export of a variety of rice from India is reduced owing to rise in prices and 20% duty on export of rice.
Over the past two weeks, export prices for Indian white rice have surged by more than 10%, extending to a nearly 30-month high. According to traders and exporters, the inflation in prices is due to the Food Corporation of India (FCI) acquiring more rice for the Central pool, as well as global currency movements. Exporters also emphasize on the Centre’s decision to terminate the distribution of free grains under the current Prime Minister Garib Kalyan Anna Yojana (PMGKAY), which in addition to the normal supply under miscellaneous welfare schemes, has led to high prices of rice. This is because those who acquired rice through the scheme are now looking for rice on the open market.
Recent Price Of Rice Soar Near MSP Levels
The New Delhi-based exporter Rajesh Paharia Jain said “In order to obtain rice, exporters have to compete with FCI; this is the reason for elevated prices in the global market. We may see some corrections, once the acquisition is completed.”
According to Jain, the procurement of Kharif Rice is increased 20% year on year by the Food Corporation of India.
The Director of Bulk Logix, VR Vidya Sagar said, “Parboiled prices have climbed by 30% in the past couple of weeks from ₹22,000 per tonne to ₹29,000 per tonne. Talks of Bangladesh purchasing rice under a government-to-government agreement have soared up the prices.”
According to statistics from the Agmarknet portal, an entity of the Agriculture Ministry, paddy prices were going up at 2419.46 per quintal last week as compared to 2,054 a year ago.
According to Consumer Affairs Ministry data, currently the average wholesale price of rice is $3,328.43 per quintal, an increase of 9.12% year on year. The majority of the price increase occurred in the previous week.
The President of the Rice Exporters Association BV Krishna Rao said “Rice prices have risen to near-minimum support price (MSP) levels, causing export prices to shoot up.”
Consistency Of Indian Rice In The Market
Based on reports laid down by the Thai rice exporters, India’s 5% broken white rice has climbed by $40 per tonne since mid-week of December, to $443-47 a tonne whereas the price of 25% of broken white rice has increased by $50 to $428-32.
Despite the boost in price, the Indian rice remains the most competitive due to its fine quality. However, Indian cereals currently have a $15 per tonne price profit over Vietnam. The prices of rice will alter after the Chinese Lunar New Year and based on the Vietnam market opening in February.
African countries are importing rice from India. According to TREA’s Rao, the increasing price is good for the rice industry because the authentic millers are purchasing in the domestic market. Tamil Nadu is importing rice from the open market due to which rice prices are going up.
Conclusion
According to the Director of Bulk Logix VR Vidya Sagar, the current rice price will not remain static for long since the elevation is not feasible. Besides that, the price of rice is also dependent on the Vietnam market and season change in Thailand. However, the major change in the prices will be seen when the FCI ends its procurement and there will be exporters and rice traders in the market. However, a rice trader also stated that the production data might be wrong due to the low physical supply of rice. Any of the above reasons could be responsible for the rise in prices of Indian rice in the last two years.
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