News / Asia

India Emerges as a Top Rice Exporter

Indian women harvest rice in a field at Raja Panichanda village, outside Gauhati, India, November 2011.
Indian women harvest rice in a field at Raja Panichanda village, outside Gauhati, India, November 2011.

Five months after lifting a ban on exports of cheaper varieties of rice, India has emerged as one of the world's top rice exporters. That has helped stabilize prices around the world, even as the cost goes up in traditional exporting nations like Thailand.

Scores of Indian rice traders have returned from a recent Grains Conference in Dubai after discussing lucrative deals. 

Brisk business expected

The head of the All India Rice Exporters Association, Vijay Setia, says business will be brisk in the coming months.

"Feeling was bullish. Demand from Iran, Iraq and the entire Middle East was big. African customers were there because of good quality and the lower price," said  Setia.

The reason: India is providing customers with a cheaper alternative to rice from top exporters like Thailand. Rice became more expensive in Thailand after floods damaged last year's crop and the government introduced a scheme to guarantee how much farmers are paid.

Effect of lifting on exports

The situation in India is dramatically different. There are huge stockpiles after a series of bumper rice crops, leading to a nearly 25 percent fall in paddy prices in local markets.  
The government responded in September by lifting a four-year-old ban on exports of lower-priced varieties of rice. India has always exported its expensive "basmati rice," but exports of other varieties were suspended in 2008 after global food prices climbed steeply.  

Samarendu Mohanty, chief economist at the International Rice Research Institute in Philippines, says India’s return to the global rice market in September prevented a spike in international prices.  

"India came as a savior. The timing was so perfect because Thailand was implementing in the same month their rice mortgage program where they increased their domestic price by nearly 50 percent. It pretty much boiled down to if Thai increased their rice by 50 percent, then global rice price also goes up accordingly. But that did not happen because of India," said Mohanty.

Price advantage

Mohanty estimates that a ton of Indian rice is currently about $100 cheaper than comparable varieties from other countries. From October to January, India shipped out 2.3 million tons of rice - even more than Thailand - as the Indian rice was sought by customers in several countries.   

Those customers include neighboring Pakistan, which is itself a rice producer and exporter. The price advantage has prompted Pakistani traders to buy rice from Indian traders for the first time.

R.S. Seshadri, director at a leading rice exporting company, Tilda Riceland, says more rice is also going to price-conscious markets in Africa.  

"Today you are able to participate in the entire price spectrum of rice trades in the world. Otherwise, previously you were restricted only to the premium $900 [per ton] plus rices. Today you are able to participate in the $350 till a $1,000 (per ton) rice export," said Seshadri.

Upbeat assessment for future

According to industry estimates, India’s share in the global rice trade could triple this year and rise to about six million tons.

Setia of the Rice Exporters Association points out that India’s granaries are overflowing.     
"India is overloaded with rice. In four years, we have accumulated our buffer stock 30 million tons, which is very large. Similarly, the private traders are also loaded with rice," said Setia.
That spells good news for global consumers, says Mohanty at the International Research Rice Institute.   

"If India stays in the market, and we don’t have any big weather crisis in Asia, I would expect prices to go down little bit," said Mohanty.  

Exports from India are expected to continue this year as there is virtually no space in Indian granaries to store more rice.

Future exports hinge on harvest

However, Seshadri of Tilda Riceland says much will depend on the size of India's rice harvest this year.

"The window of review will be in May when the first estimates of monsoons are put out. India will determine whether it needs to tighten or loosen its export policy. There will never be a situation where India cannot take its eye off the ball because internal consumption is so large that one cannot but keep a very close eye on it," said Seshadri.

India is the world’s second largest rice producer. But with 1.2 billion people to feed, rice exports are only permitted after the government stores sufficient surplus to meet emergency needs such as a crop failure due to drought.



You May Like

Video Miami Cubans Divided on New US Policy

While older, more conservative Cuban Americans have promoted anti-Castro political movement for years, younger generations say economically, it is time for change More

2014 Sees Dramatic Uptick in Boko Haram Abductions

Militants suspected in latest mass kidnapping of over 100 people in Gumsuri, Nigeria on Sunday More

Video Cuba Deal Is Major Victory for Pope

Role of Francis hailed throughout US, Latin America - though some Cuban-American Catholics have mixed feelings More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid