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India may export 75,000 tonnes of broken rice to three African nations

Trade awaits DGFT order on policy renewing fully broken rice shipments

India will likely export 75,000 tonnes of fully broken white rice under government-to-government (G2G) deals to Senegal, Gambia and Djibouti soon, traders have said.

The move follows the Indian government’s decision last week to permit exports of fully broken white rice — which were banned from September 8, 2022 — on the basis of permission given by it to other countries to meet their food security needs.

“However, the policy is yet to be announced by the Directorate-General of Foreign Trade,” said Rajesh Paharia Jain, a New Delhi-based trader.

Earlier shipments

The development comes amidst demand from African countries which look to India for supply of fully broken white rice, besides parboiled rice. 

Earlier in March, the Government permitted exports of 2.5 lakh tonnes of broken rice to Senegal and one lakh tonnes to Gambia. In addition, about 10,000 tonnes of the rice variety were permitted to be shipped to Djibouti, Ethiopia. 

The development augurs well when demand for rice from South-East Asia is a bit slack. The slackness in demand is despite Indian prices being far more competitive to the rates offered by Thailand or Vietnam or Pakistan. 

“Indian origin rice is still cheaper than Vietnamese and Pakistani origin rice. It is widely accepted unlike in the past and despite a 20 per cent duty on free-on-board (FOB) value which is $65-75 depending upon the grades,” said Jain.

Enquiries taper

“Though we are competitive, Indian rice prices have gained of late. But overall, prices are a bit unstable,” said VR Vidya Sagar, Director, Bulk Logix. 

“After we shipped a good quantity to South-East Asia, enquiries have tapered down now,” said M Madan Prakash, President, Agri Commodities Exporters Association (ACEA). 

“For unexplained reasons, there is some dullness in rice exports to South-East Asia. Maybe, they will pick after June,” said S Chandrasekaran, a Delhi-based trade analyst.

Jain said 5 per cent broken white is ruling at $480 a tonne and 25 per cent broken at $460. The offer price includes the 20 per cent export duty. 

In contrast, Thailand is quoting these varieties at $511 and $494, respectively. Vietnam is offering these at $498-502 and $483-87, respectively. These prices are free-on-board (FOB). 

India’s advantage 

Sagar said demand for Indian rice will continue as in the previous years since its prices are lucrative. “India is centrally located and freight charges too are below compared to Thailand or Vietnam. People are also buying,” he said.  

On the other hand, parboiled rice is quoted over $80 a tonne cheaper than the nearest competitor, said Jain. “We are offering parboiled rice around $385 f.o.b for July and August shipments,” he said, adding that demand from other countries for the parboiled rice is shifting to India.   

India is offering 5 per cent broken parboiled rice at $385 a tonne f.o.b, while Thailand is quoting at $523 and Pakistan $583-87. 

Record output 

India’s rice exports are expected to be boosted by a record production of 135.54 mt this crop year to June against 129.97 mt last crop year. Rice production gained during the rabi season and will likely be good during the ongoing zaid season between rabi and kharif sowings. 

This crop year, kharif production was 1 mt lower compared to last crop year as deficient rainfall in key growing regions of West Bengal, Odisha, eastern Uttar Pradesh and Jharkhand were affected.

As a result, the Government imposed 20 per cent export duty on white rice shipments from September 8, 2022, and banned fully broken rice exports, which was relaxed last week. However, it exempted basmati and parboiled rice exports from any curbs. 

Jain said Bangladesh is expected to be in the market for importing rice under G2G deals.

https://www.thehindubusinessline.com/economy/agri-business/india-may-export-75000-tonnes-of-broken-rice-to-three-african-nations/article66916514.ece QR Code

Published Date: June 1, 2023

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