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

DRC Tries Mega-Farms to Feed Population

Park at Boukanga Lonzo currently has 5,000 hectares under cultivation, crops stretching as far as eye can see, and is start of ambitious large-scale agriculture plan More

Video Survivor Video Testimonies Recount Horrors of Guatemalan Genocide

During a conflict that spanned more than three decades, tens of thousands of indigenous Mayans were killed More

Video War, Drought Threaten Iraq's Marshlands

Areas are spawning ground for Gulf fisheries, a resting place for migrating wildfowl, source of livelihood for fishermen and herders who have called the marshes home for generations 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.
Nobel Prize Winner Malala Talks to VOAi
X
August 31, 2015 2:17 AM
Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.

VOA Blogs