Shipment term

Rice exporters face double challenge after record shipment of 17 tonnes

Indian non-basmati rice exporters, after shipping nearly 17 million tonnes in 2021-22, face the twin challenges of rising freight costs and the return of Thailand, a major supplier, to the international market in during the current fiscal year. That could lead to a 10-15% drop in shipments, exporters said.

According to the latest official data available through the end of February for the 2021-22 financial year, non-basmati shipments increased by around 40% to 15.61 million tonnes, from 11.17 million tonnes a year ago. year. In dollar terms, shipments of non-basmati rice rose 35.2% to $5.551 billion in April-February 2021-22 from $4.105 billion a year ago.

“We will touch nearly 17 million tonnes for the 2021-22 financial year, a new record from the previous year’s 13 million tonnes,” said BV Krishna Rao, chairman of the Rice Exporters Association. March export data is presented with a lag.

The target for the year was 16 million tonnes.

On the outlook for the new fiscal year, Rao said high freight costs remained a concern and supplies from Thailand had resumed, posing a challenge for Indian exporters.

The government must help

“Last year Thailand did not have a good harvest due to bad weather. But this year they have made a comeback and are fighting well,” Rao said, adding that Indian shipments will be 10-15% lower this year. “We are unlikely to maintain 17 million tonnes unless the government helps other countries buy more rice, as it has done for Sri Lanka,” Rao added.

Freight rates have increased compared to last year due to soaring fuel prices, triggered by the Russian-Ukrainian conflict.

Rao said higher ship rates have forced buyers, mainly in Africa, to adopt a wait-and-see approach. Freight rates have fallen from around $90 per ton to around $140, while rice prices are largely stable.

“The buyer is unwilling to pay the extra $50 and would wait for ship prices to drop,” Rao said. This is reflected in the decline in the number of ships moored at the port of Kakinada, one of the main rice loading points on the eastern coast. “Usually at least 10 ships in Kakinada were loaded last year at this time. Now there are only three.

Trade sources said Indian rice shipments were already slowing, according to February figures, when non-basmati shipments fell 1.4% to 1.618 million tonnes (1.641 million tonnes a year ago).

Free on board (FOB) parboiled rice from Indian ports is quoted at $365 per ton ($370-$380). White rice prices fluctuate between 335 and 340 dollars per ton, roughly at last year’s level. Prices for broken rice went from $270 per ton FOB to $315-320. “Only broken rice prices have increased as it is seeing good demand due to high maize prices,” Rao said.

The demand for broken chips, which are used for food ingredients, comes from China, Indonesia and Africa, among other regions.

Published on

April 05, 2022