• Wednesday, Dec 07, 2022
  • Last Update : 09:54 am

Analysis: India may corner nearly half of global rice trade as exports soar to record

  • Published at 06:14 am September 18th, 2021
India rice trade - reuters
File phot of a worker collecting boiled rice to spread it for drying at a rice mill on the outskirts of Kolkata, India on January 31, 2019 Reuters

The world's biggest exporter may ship up to 22 million tons of rice this year, which is more than the total exports of the next three largest exporters, Thailand, Vietnam, and Pakistan

India could account for as much as 45% of global rice exports in 2021 as expanded port-handling capacity allows the world's second-largest rice grower after China to ship record volumes to buyers across Africa and Asia.

The world's top exporter could ship as much as 22 million tons of rice this year, or more than the combined exports of the next three largest exporters Thailand, Vietnam and Pakistan, said Nitin Gupta, vice president of Olam India's rice business.

He said: "Along with traditional buyers, this year China, Vietnam and Bangladesh are also making purchases from India."

India's exports in 2020 jumped 49% from the year before to a record 14.7 million tons, as shipments of non-basmati rice spiked 77% to a record 9.7 million tons.

In 2021, non-basmati rice shipments could nearly double from a year ago to 18 million tons, while premium basmati rice exports are seen steady at 4 million tons, Gupta said.

The US Department of Agriculture projects global rice exports of 48.5 million tons in the 2021-22 season.

Logistical Bottleneck

Indian rice has been consistently cheaper than supplies from Thailand and Vietnam since last March, while global demand for rice has scaled record highs.

However, limited infrastructure at Kakinada Anchorage, India's main rice port, led to persistent congestion and lengthy loading delays last year, prompting some buyers to switch suppliers.

India was offering a discount of more than $100 per ton over other exporters, but much of the discount was wiped out by higher demurrage charges tied to the delays, says exporter Brahmananda Gudimetla.

To ease the congestion, the southern state of Andhra Pradesh in February allowed the use of an adjoining deepwater port at Kakinada for rice shipments.

Also Read - Export-import continue with India amid Covid fears

BV Krishna Rao, president of the Rice Exporters Association of India, said: "Vessel waiting period has gone down after the deepwater port started handling rice. Demand that could have shifted to other countries remained with us."

India exported 12.84 million tons of rice in the first seven months of 2021, up 65% from a year ago, according to provisional data from the commerce ministry.

At least one million tonnes of rice would be shipped from the deepwater port in 2021, said M Muralidhar, chief operating officer of Kakinada Seaports Ltd.

Shipping Shakeup

Despite extra port capacity, Kakinada's loading rate still lags well behind Southeast Asian ports due to a lack of dedicated rice-handling infrastructure.

"Here in Kakinada, it takes nearly a month to load around 33,000 tons of rice from the time we drop the anchor. In Thailand it takes only 11 days for the same quantity," says Fahim Shamsi, the caption of a ship that was loading rice at Kakinada this month.

The strain on the Kakinada port has increased after the cost of shipping rice by container surged, forcing rice shippers to switch from containers to bulk vessels, said Gupta of Olam.  

Rao said: “Kakinada can export an additional two million tons of rice if the infrastructure was upgraded and the process mechanized.”

India's exports of non-basmati rice go mainly to African and Asian countries, while premium basmati rice goes to the Middle East, the United States and Britain.

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