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

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

Judge Declares Washington DC Ban on Public Handguns Unconstitutional

Ruling overturns capital city's prohibition on carrying guns in pubic More

Pricey Hepatitis C Drug Draws Criticism

Activists are using the International AIDS Conference to criticize drug companies for charging high prices for life-saving therapies 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.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid