Rice exports hit by low demand, no price parity
Subdued demand amid lack of price parity has dampened spirits of rice exporters pinning elevated hopes on ban revocation on export of 100 per cent broken rice by the Indian government as lower prices by other exporting nations including Vietnam, Thailand and Pakistan has diminished demand.
India on March 7 allowed the export of 100 per cent broken rice which had been prohibited since September 2022 owing to substantial inventories. Broken rice is a byproduct of milling, and African nations prefer this grade because it is more economical than other grades.
“There is minimal demand for Indian origin rice because prices are considerably high in the global markets. Other exporting nations are offering at substantially lower cost and this has kept the buyers distant. Additionally, the share of Madhya Pradesh in rice export is modest due to which it faces robust competition in the domestic and international markets,” said exporter from Indore wishing anonymity. Three exporters said, Indian origin broken rice is offered higher by $30-40 per tonne as against Vietnam at $320-$330 per tonne.
Exports of rice from Madhya Pradesh in FY 2024 amounted to Rs 3,634 crore, an increase of Rs 714 crore from the preceding year, according to the official data from Directorate General of Foreign Trade (DGFT). Cereals contribute about 13 per cent in the total export basket of MP. The prominent rice-producing districts in MP include Jabalpur, Mandla, Balaghat, and Seoni, where various varieties of organic and aromatic rice are cultivated. The rice grown in Balaghat has been awarded a Geographical Indication tag.
“We could have witnessed some upside in rice exports if the government had lifted the ban timely. Indonesia has already procured substantial quantities of rice besides other African and South East Asian buyers are not showing interest at these rates. African markets seek economical rates and here Vietnam has an advantage due to rates and superior aroma than India,” said Vinay Agarwal, an exporter dealing in multi commodities.
This article has been republished from The Times of India.