The Hindu Business Line : Rice exporters unlikely to make offers till mid-Jan — Millers in AP more keen on meeting levy obligations

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Rice exporters unlikely to make offers till mid-Jan — Millers in AP more keen on meeting levy obligations

M.R. Subramani

Chennai , Dec. 27

TRADING in rice has turned dull due to year-end holidays but exporters are unlikely to make offers until middle of January.

"This is because mills, particularly in Andhra Pradesh, are trying to fulfil their obligations to supply to the public distribution system. They are not ready to make any fresh offers," said trade sources.

Under the levy obligation, the State Government procures a stipulated amount of rice at a fixed rate for the Central pool. Andhra Pradesh contributes over 35 per cent of the rice it produces to the Central pool.

"Rice is available in Andhra Pradesh but the mills are more keen to meet their statutory obligations. This is in view of a directive from the State Government," said the sources.

Though kharif rice production is reported to be good, recent rains have caused some damage, especially in Andhra Pradesh. As per the first advance estimates made by the Ministry of Agriculture, kharif rice production is projected to be 73.83 million tonnes (mt) against 71.67 mt last season.

"Rains during November and this month have affected the quality of the rice. The paddy has been discoloured and the solution lies in converting into parboiled where polishing can take care of the problem. Converting it into white rice will certainly be a problem," the sources said.

"The yield can be maintained if we go in for parboiled. If the paddy is to be converted to white rice, then the yield will be down since the grains can get broken," they said.

In the international market, trade is slow due to the holidays and also because stocks are available at the destinations. "Demand globally is stagnant. There is no liquidity in the market as all buyers have stocked up," the sources said.

Also, with Pakistan's white rice being quoted lower, India stood no chance of selling its white rice. While Pakistan's 25 per cent broken is quoted at $217 a tonne, India's quote is $236.

"The only opportunity is parboiled rice but the market is slow currently," they said.

India specialises in the parboiled category with Thailand being the only competitor. Currently, India's parboiled 5 per cent broken is quoted at $270 a tonne and Thailand quotes $276. Nigeria, South Africa, Djibouti, Somalia and Senegal are main buyers of parboiled rice.

According to the Agricultural and Processed Food Products' Export Development Authority, non-basmati exports during April-September of the current fiscal were 20.03 lakh tonnes valued at Rs 2,135 crore compared with 9.04 lakh tonnes valued at Rs 989 crore during the corresponding period a year ago.

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