Indian Rice Exporters Unlikely To Seek Export Duty Rollback Amid High Demand Of Indian Rice In Global Markets

Indian Rice Exporters Unlikely To Seek Export Duty Rollback Amid High Demand Of Indian Rice In Global Markets

World’s largest rice exporter, India, commands about 40% of the global rice trade and is followed by Vietnam and Thailand in terms of rice exports.

India’s Rice Production

Despite kharif output being lower, India will likely benefit from a record-high crop this season through June. In comparison to last year’s 130.5 million metric tonnes (MMT), the Ministry of Agriculture estimates that 130.83 MMT of rice will be produced this year.

The projected rabi production for this year is 22.76 MMT, up from 18.5 MMT in the previous year. Due to higher acreage in States like Telangana, rice production is predicted to be higher during the rabi season.

India’s Rice Export Policy

In an effort to control domestic prices in the wake of worries that the crop would be harmed by insufficient rains, the Center imposed a 20% duty on white and brown rice exports on September 8, 2022.

The decision was made at a time when there was a high demand for Indian rice on the international market and prices from other origins, like Thailand and Vietnam, were much higher.

Current Scenario

As long as the volume of shipments does not decrease, Indian rice exporters are unlikely to ask the government to roll back the 20% export duty.

BV Krishna Rao, President, The Rice Exporters Association (TREA), said, “Demand for Indian rice has picked up despite the export duty. Some buyers might have converted from buying white (raw) rice to parboiled (boiled). The duty has helped the government.”

Rao added that the Centre could have easily made $0.5 million (414 crore) even if it had earned $50 per tonne on average since September. He also mentioned about the export policy, “If there is a drop in the exports volume in any quarter then we might approach the Government for some remedy. Until then, we may not seek a duty cut.”

Rising Enquiries For Rice

According to data from the Agricultural and Processed Food Products Export Development Authority (APEDA), non-basmati rice exports from April through January of this fiscal year were 14.56 MMT, up from 14.01 MMT during the same period in the previous year. Exports between September and January were 5.48 MMT, a slight decrease from 5.8 MMT the previous year.

Agricultural Commodities Exporters Association (ACEA) President M. Madan Prakash reports that enquiries for Indian rice, particularly 5% white rice, is strong. “Vietnam is seeking 5% white rice and we are quoting around $430 a tonne cost and freight.”

According to Bulk Logix Director VR Vidya Sagar, there is a continuity in demand for Indian rice, especially parboiled rice. “Prices have stabilized now after a fall. There is decent demand for 25% broken white rice from Vietnam for use as feed.” Demand for parboiled rice is high in Coutnou, Casablanca, and Jordan. Although there is a respectable market for Indian rice, Sagar said exporters still do business with their usual clients.

Rice Pricing

While white rice costs more than $400 per ton, Indian parboiled rice is listed at around $390 per tonne. Depending on the variety, the price of the 25% white rice is quoted between $380 and $410.

According to a Delhi-based analyst, rice prices are holding steady now that the new crop arrivals in Vietnam and Thailand have started. But from April onward, prices might start to rise, and they might keep moving north until September. He also mentioned that “Prices will be firm at least tillSeptember.”

As the Thai Baht strengthened last week, rice prices in Thailand decreased by 1% on the international market. However, when compared to rice from other origins such as Vietnam and Thailand, Indian rice is still competitive by over $10 a tonne. As per the analyst, “The difference in price will increase once Thailand and Vietnam arrivals get over.”

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