BENGALURU : The strengthening rupee has added to the woes of Indian non-basmati rice exporters, who are battling logistics hurdles, mainly the non-availability of covered rakes in adequate numbers in the eastern region that has slowed down the shipments of the cereal.
Non-basmati rice shipments in the April-January period of the current financial year stood at 5.21 million tonnes, down 2.6 per cent over the corresponding period last year.
The rupee has strengthened by about 4 per cent against the dollar since the beginning of the year till date.
“Non availability of covered rakes has been a big problem this season. This has impacted the movement of rice from Chhatisgarh region to the ports in Andhra Pradesh over the past three-four months. Transporting rice in open wagons increases the risks for exporters as insurers do not extend cover to such cargo,” said BV Krishna Rao, President of the Rice Exporters Association.
“The infrastructure hurdles like the non-availability of covered rakes are seen as a dampener on exports,” said S Venkatesh, CEO (Mumbai Operations) Agri Trade India Services Pvt Ltd. Though the shipments are a bit subdued now, the prospects look bright as they are expected to pick up ahead of Ramadan, he added.
India has steadily built a profile in the non-basmati rice market after exports were opened up in 2011. Africa has been a major destination for Indian non-basmati rice, where it competes with exporters from Thailand, Vietnam and Pakistan. In the past few years, India has been the largest exporter of rice — including both basmati and non-basmati — with the total volumes exceeding 10 million tonnes.
Rao said the strengthening rupee has further hurt the realisations of the exporters and made Indian rice, especially the whites, expensive in the world market.
India exports three varieties of non-basmati rice — white rice, parboiled and 100 per cent brokens. Parboiled accounts for some 30-40 per cent of the nation’s non-basmati shipments, followed by whites at 20-30 per cent.
Uncompetitive Prices
“We are expensive by at least 10 per cent for white rice when compared to other origins such as Thailand, Vietnam and Pakistan. This is because of higher price due to rise in MSP and the strengthening rupee. As a result, we are uncompetitive in this category at the moment, which is hurting the demand,” Rao said. However, the demand is intact in parboiled and brokens categories.
Notwithstanding the logistics hiccups, Indian exporters expect to maintain non-basmati shipments at last year’s levels of over 6 million tonnes in the current financial year. Despite drought affecting the southern parts of the country, India is expected to produce a record 108.86 million tonnes of rice in the 2016-17 season, according to the second advance estimates.
Source: Thehindubusinessline.com
