Paddy is the main Kharif crop which is sown with the onset of the southwest monsoon in June and the harvesting starts from October onwards. The Central Government restricted exports of broken rice and imposed duty on exports on various other types on 8thSeptember’22. In an attempt to boost domestic supplies, the government also imposed a 20% export duty on all varieties of non-basmati rice except for parboiled rice.
In a move to boost domestic supplies, the Government of India imposed a 20 percent export duty on all varieties of non-basmati rice except for parboiled rice. This move came into effect following a fall in area under the paddy crop due to several rounds of heatwaves throughout the country and low rainfall. The government has now extended the last date for the export of broken rice in transit till September 30 which was earlier allowed till September 15.
The Bangladesh Cabinet Committee on Economic Affairs (CCEA) gave the approval to the Directorate General(DG) of Food and the Trading Corporation of Bangladesh(TCB) to buy rice, soybean oil and lentils from the domestic and international market for sale at subsidised rates among low income groups. Currently, rice stocks with Bangladesh are only at 1.8 million tonnes.*
Rice is a staple food of Asia and part of the Pacific. Over 90% of the world’s total rice is produced and consumed in the Asia-Pacific region.
Rice is the principal crop of Cambodia’s farmers and accounts for 15% of the agricultural value added and 75% of the cultivated land. Cambodia exported 1,68,280 tonnes of Milled Rice to China in the first half of 2022, up 17.4% over the same period last year earning $89million in revenue.
On May 13 this year, India restricted exports of wheat. Though it exports only a small portion of its produce, it still is the second largest producer of wheat in the world. The onus for the wheat export curb goes to unusual summer causing heatwave and thus leading to low production yield in the country. Now, the real fear comes when the Government is planning to cut off rice export from India as well.
Bangladesh is still recovering from the flood that hit its population. Thousands of homeless and destitute people have struggled to deal with extreme flooding. Among other parts, Bangladesh’s northeast was hit by flash floods this May, followed by the monsoon in June and July which brought erratic and excessive rainfall. Such was the severity that an unprecedented 970 millimeters (38 inches) of rain was recorded in a day, as per the Indian Meteorological Department (IMD). As a part of emergency response, the government of Bangladesh has provided relief along with other aids that included housing materials.
26% rise in exports can be called phenomenal I guess. This rise in basmati rice exports has not happened in a span of decade or half a decade or a year but just one solitary quarter. Q1 export data of 2022-23 financial year shows 26% rise in rice exports from Indian shores. $1.15 billion exports by value is a handsome rise over $922 million rise in the corresponding period last year. Rise in export of Pakistani basmati is no match to growth in export of Indian basmati but Pakistani basmati dominates European Union market and is giving stiff competition to Indian basmati in Middle East. Indian domination on global basmati trade is not easy to challenge by Pakistan but still India is wary of Pakistani challenge as Pakistani claim on basmati brand is quite genuine. Only problem with Pakistani claim is production that is many times higher in India compared to Pakistan.
The world is now witnessing one landmark after the other related to Ukrainian grain freeing endeavor of United Nations. First a deal to export Ukrainian grain via Odesa and other Ukrainian black sea ports between Russia, Ukraine and Turkey in the tutelage of UN was signed and then came another landmark moment when first cargo ship Razoni departed from Odesa under the deal. Now finally modalities have been agreed upon to make resumption of grain and fertilizer shipments from Ukrainian black sea ports including Odesa attractive enough for shipping and insurance companies. Under the new agreement 10 nautical mile buffer zone has been earmarked to protect Ukrainian grain ships.
Thailand is all set to beat Vietnam in the global rice market and earn the second spot below numero uno India. 3.50 million ton is the exports from Thailand in the first six months of this year, which is 56.6% higher than first six months of last year. By value also export growth is good 42.9%. Thai agriculture and cooperatives minister Chalermchai Sree-on shared his optimistic target of upstaging Vietnam in global rice market. He said that if Thai rice exports cross seven million tons then Vietnam will be upstaged by Thailand. Soaring rice exports will improve domestic prices in Chalermchai’s opinion. Customs dept. data and Thai rice export association data shows that huge 69.4% and 57.1% month-on-month rise in rice exports was seen in June 2022 by volume and value respectively. 13.12 billion bahat worth 764131 tonnes rice was exported in June compared to 8.35 billion bahat worth 450973 tonnes of rice exported in May.
Loss of one means gain of other in perfect competition market. Vietnam and Thailand are two main competitors of India in global rice market. Current fiscal can be year of bonanza for Indian rice export business on account of drop in yield and rise in production cost of competitors Thailand and Vietnam. $420 a tonne is price of Vietnamese and Thai rice in global market, which is $60 higher compared to Indian rice. That’s not all, it is believed that the gap will only widen with time. Expected robust kharif crop in India may enable high returns for exporters. Last year’s record breaking 21 MT rice exports no way looks insurmountable this year and according to AIREA president, this year’s export figures will surpass last year’s figures by a little bit.