India basmati rice exports seen up Jan-Mar on demand from West Asia
Informist, Friday, Feb 23, 2024
By Sandeep Sinha
MUMBAI – A seasonally strong quarter and better realisation will lift Indian basmati rice exports in Jan-Mar, say market participants. "The country is likely to export 1.3-1.4 mln tn basmati rice in March quarter," said Prem Garg, national president, Indian Rice Exporters' Federation.
Garg sees India's basmati rice exports touching 4.8-4.9 mln tn in 2023-24 (Apr-Mar) driven by higher exports to Saudi Arabia, Iran and other West Asian countries. In 2022-23, India exported 4.6 mln tn of basmati rice.
EXCLUSIVE
"Demand for basmati exports will go up as most of our regular buyers in West Asia will keep purchasing from India. The onset of Ramadan in early March will see increased demand for basmati rice as special foods such as pilaf (pulav), biryani, and other rice recipes are made during fasting month," Sonali Gedam, a Pune-based trader, said.
India's basmati rice exports rose 17.8% on year to 548,392 tn in December, the highest ever for the month, on increased purchases by Iran and Saudi Arabia. India exported 465,489 tn in the same period a year ago, data from the commerce ministry showed.
In the first nine months of 2023-24, the country's basmati rice exports surged 10.8% on year to 3.54 mln tn, according to Agricultural and Processed Food Products Export Development Authority data. The average realisation on basmati export has improved to $1,120.87 per tn in Apr-Dec this year.
The average realisation was at $1,049.64 in 2022-23.
Sentiment also got a boost by the government's decision to extend the 20% export duty on parboiled rice beyond Mar 31. In October, the government extended the 20% duty on the rice variety till Mar 31 to ensure the availability of rice at affordable prices in the domestic market. India is the largest rice exporter in the world, with a 40% global market share, and the move will restrict availability of non-basmati rice for exports.
"To check the domestic prices and to ensure domestic food security, the government has been taking measures to restrict export of rice from India. The export of non-basmati white rice was prohibited on Jul 20, 2023. Despite this restriction, there has been a notable increase in the export of parboiled rice and Basmati rice, both of which were not subject to export limitations. This surge in rice exports has been observed during the current year. This was due to the lower prices of Indian rice as compared to the international prices," Manoranjan Sharma, chief economist, Infomerics Ratings said.
Additionally, the Centre cut the minimum export price to $950 per tn for basmati in October to discourage export of the basmati rice variety, Sharma said. The government in August imposed a minimum export price of basmati rice at $1,200 per tn.
However, Sharma cautioned that if the Red Sea shipping issue prolongs, there is a real concern that it could significantly harm basmati rice exports. The reliance on longer shipping routes due to the conflict may result in transportation costs increasing by 15-20%, posing a direct threat to the competitiveness and affordability of Indian basmati rice in the global market. End
