Global Rice News

The number of vessels docked at Kakinada port, a major rice loading point on the eastern coast, fell to three from 10 last year

Higher freight, return of Thailand to international market weigh on supplies from India.

Exporters of Indian non-basmati rice, after shipping close to 17 million tonnes in 2021-22, are facing the twin challenges of higher freight cost and the return of Thailand, a major supplier, to the international market in the current financial year. This may lead to a decline of 10-15 per cent in shipments, exporters said. As per the latest official data available till end-February for the financial year 2021-22, non-basmati shipments grew by around 40 per cent to 15.61 million tonnes, from 11.17 million tonnes a year ago. In dollar terms, non-basmati rice shipments were up 35.2 per cent at $5.551 billion in April-February 2021-22 against $4.105 billion a year ago. “We will be touching close to 17 million tonnes for fiscal 2021-22, a new record over the previous year’s 13 million tonnes,” said BV Krishna Rao, President, The Rice Exporters Association. The export data for March comes with a lag. The target for the year was 16 million tonnesr. On the outlook for the new financial year, Rao said high freight costs remain a concern and supplies from Thailand have resumed, posing a challenge to Indian exporters.

Govt needs to help

“Last year, Thailand did not have a good crop due to bad weather. But this year, they have made a comeback and are giving a good fight,” Rao said, adding that Indian shipments will be lower this year by 10-15 per cent. “We are unlikely to maintain 17 million tonnes unless the Government helps other countries buy more rice, like it did for Sri Lanka,” Rao added. Freight rates have moved up from last year as fuel costs have surged, triggered by the Russia-Ukraine conflict. Rao said the higher vessel rates have forced buyers, mainly in Africa, to adopt a wait-and-watch approach. Freight rates have gone up from around $90 per tonne to around $140, while rice prices are largely stable. “The buyer is not keen on paying the extra $50 and would wait for vessel prices to come down,” Rao said. This is reflected in the decline in the number of vessels docked at the Kakinada port, one of the major rice loading points on the eastern coast. “Usually, at least 10 vessels in Kakinada were being loaded last year around this time. Now there are only three.” Trade sources said Indian rice shipments are already slowing, going by the numbers in February, when non-basmati shipments fell 1.4 per cent 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 tonne ($370-380) . White rice prices are hovering at $335-340 per tonne, at around last year’s levels. Broken rice prices have moved up from $270 per tonne FOB to $315-320. “Only broken rice prices have moved up as it is witnessing good demand due to high corn prices,” Rao said. The demand for brokens, which is used for feed ingredients, is from China, Indonesia and Africa among other regions.

Source: https://www.thehindubusinessline.com/economy/agri-business/rice-exporters-face-twin-challenges-after-record-17-mt-shipment/article65292271.ece