Business Daily from THE HINDU group of publications
Tuesday, Oct 31, 2006
Agri-Biz & Commodities
Industry & Economy - Exports & Imports
White rice exports slow down on Pakistan factor
Kharif rice arrival expected in December.
Lack of long grains from exporting centres.
White rice exports likely to pick up from February.
Chennai , Oct. 30
Rice exports from the country have slowed down a bit with mainly parboiled rice being shipped on demand from African destinations.
This is despite demand from Africa and Indonesia; and Vietnam running out of stocks.
"Our white rice exports have slowed down as the arrival of the new crop has begun in Pakistan. They are offering a very competitive price," trade sources said.
Currently, Pakistan is quoting $240-242 a tonne f.o.b for 25 per cent broken white, while Indian prices for the same is higher.
"Our kharif rice arrival in places such as Andhra Pradesh will be only towards December. Currently, long grain whites are not available from export destinations. Though rice grown in Punjab and Haryana have hit the market and long grains can be got from there, it costs a bit to bring them to South for milling," the sources said.
Hike in MSP
"Also, within the country, the Centre has hiked the minimum support price for rice by Rs 500 a tonne. That has added to our costs," the sources said.
The Centre has estimated kharif rice production at 76 million tonnes, up from 74 million tonnes a year ago.
In Asia, rice prices are gaining also because of internal demand in Vietnam and Thailand is due to announce its price for its intervention programme. The programme begins on November 1.
Trade sources said Pakistan could now garner good demand as prices in other sources were high.
Currently, Thailand quotes its 100 per cent white rice at $307-308 a tonne, while for five per cent broken it is $297-300.
Vietnam, too, is quoting higher with its five per cent broken ruling at $285 and 25 per cent broken at $260-270.
"The problem buyers could face with Pakistan is that its traders tend to cancel contracts once they see prices moving. On the other hand, buyers have been sidelined by the high prices," the sources said.
In these circumstances, parboiled exports are keeping things going for Indian exporters. "Though demand is not high, decent trade is taking place," the sources said.
"Also, with only Thailand being the only other source in the parboiled sector, India is able to drive its advantage in Africa and West Asia markets not only on the price front but also on the freight front," they said.
"It should not be a problem for us this year to export 40-50 lakh tonnes of rice, mainly parboiled," the sources said.
Parboiled rice is being offered between $245 and $260 a tonne f.o.b depending on quality.
As regards white rice, the trade expects a pick-up only from February as only by then Pakistan is expected to exhaust its stock. Pakistan is projected to produce between 1.6 million tonnes and two million tonnes rice this year. "A firm projection is expected this week," the sources said.
Meanwhile, some of the exporting firms are doing small deals.
In the last fortnight, a little over 2.5 lakh tonnes of parboiled rice have been contracted for exports to Nigeria and other African destinations at prices over $245 a tonne f.o.b.
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