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Most rice export deals by govt fail to result in trade, say exporters

13 December 2023

MUMBAI – After imposing a ban on rice exports, the Centre has sanctioned export of the grain to more than 10 countries on a government-to-government basis. So far, however, India has managed to export rice to only three of them, with the amount shipped falling well short of total allocation, trade sources told Informist.

Though the Centre is allocating rice for exports to several countries, India is having a difficult time securing deals as the government does not have a clear pricing strategy, said B.V. Krishna Rao, president of The Rice Exporters Association of India.

EXCLUSIVE

India has allocated more than 2 mln tn of rice, including non-basmati white rice and broken rice, for export to more than 10 countries. But so far, it has shipped rice only to Mauritius, Bhutan, and Nepal.

On Aug 30, India allocated 79,000 tn of non-basmati white rice for export to Bhutan, 14,000 tn for export to Mauritius, and 50,000 tn for Singapore. Of this, the cooperative export body set up by the government shipped a consignment of 5,300 tn to Mauritius, said a Delhi-based exporter. Only a few consignments have left for Bhutan and Nepal so far.

The Centre formed National Co-operative Exports Ltd in January to execute government-to-government deals. The agency procures, processes, and trades goods that are permitted only under government-to-government deals. Officials at the agency did not respond to questions from Informist.

A month after the agency was set up, India permitted the export of 75,000 tn of white rice to the United Arab Emirates. In October, 1.03 mln tn was allocated to the Philippines, Cameroon, Nepal, Malaysia, Cote d'Ivoire, Guinea, and Seychelles.

The UAE has a large population of Indian expatriates and the allocated rice will be exported by Mar 31, a major Delhi-based exporter said.

Asked about the delay in securing orders, Rao said, "They (the agency) have to sell by calling tenders, and they do not have a clear-cut pricing strategy."

National Co-operatives Exports is quoting prices with duty and buyers are asking for orders with nil duty, said a Chennai-based exporter.

Some exporters believe India might miss out on orders from the UAE. Except for the Sona Masuri variety, the UAE is not running short of rice stocks. The country may even turn to Pakistan for supplies, the Chennai-based exporter said.

The Indian long grain white rice variety is currently priced below $500 per tn, while similar varieties from Thailand and Pakistan are priced around $560 per tn, said exporters. But with the cooperative agency delaying "commercial decisions", international rice prices will drop as new crop arrivals begin in Thailand in February, Rao said.

India banned exports of broken rice and non-basmati white rice in July 2023 and September 2022, respectively. It only permits exports at the request of foreign governments to meet food security needs.

After India banned rice exports, global rice prices surged to a 15-year high. But domestic prices dropped as export restrictions increased availability at home.

In September, The Rice Exporters Association had written to the cooperation ministry to consider private millers who have consistently paid minimum support prices to farmers for trade collaboration with the agency.

In the past five years, private exporters have delivered an average of 10 mln tn of rice annually, while the cooperative export body has not achieved even 10,000 tn so far, the association said in its letter dated Sep 27. 

Source : informistmedia

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