Mumbai: ‘India's rice exports could slide by nearly a quarter in 2014 and knock the country off its perch as top exporter of the grain due to stiff competition from Southeast Asian rivals that have recently slashed prices’, said Indian industry Executives.
A drop in Indian exports could help Thailand trim a record inventory chalked up under a controversial rice-buying scheme. Thailand may also be able to reclaim its status as the world's biggest rice exporter, which it lost to India two years ago. It will also leave more rice in Indian hands at a time when the country's stocks are bulging and it faces the prospect of a record harvest, creating problems of storage."We are almost out of the market now. Thailand and Vietnam are selling aggressively and it is difficult for Indian exporters to match those prices," said B.V. Krishna Rao, Managing Director at Pattabhi Agro Foods Pvt Ltd.
India toppled Thailand in 2012 to become the world's biggest rice exporter after the government lifted a four-year-old ban on non-basmati rice shipments in 2011 to trim a growing mountain of the grain following bountiful harvests. In the 2013/14 financial year that ended on March 31, India's total rice exports stood at a record 10.5 million tonnes, comprising 4 million tonnes aromatic basmati rice and 6.5 million tonnes of the non-basmati variety.
While India's shipments of the basmati variety are likely to remain steady in 2014/15 at around 4 million tonnes, total rice exports could drop to 8 million tonnes due to the slide in exports of non-basmati rice, industry officials said.Desperate for revenues, Thailand has this year been selling larger quantities of the grain from state warehouses at low prices to private traders. Thailand-origin rice was offered at the lowest price in an international tender from Iraq's state grains buyer to purchase at least 30,000 tonnes, European traders said on Tuesday.
The push could boost Thailand's rice exports to 9 million tonnes in the 2014 calendar year from 6.7 million a year ago, according to a March report issued by a US Department of Agriculture attache in Thailand. India's exports in the 2014 calendar year are expected to be lower than that, industry executives said. Thailand is now offering 5 per cent broken rice at $390 to $395 per tonne free-on-board basis, compared to India's offer price of $400. The Southeast Asian nation usually charges a premium over Indian rice due to its longer grains
"India and Thailand are quoting nearly the same price for 5 per cent broken rice. Thailand's prices need to go up by $40 per tonne to make Indian exports viable," concluded M. Adishankar, Executive Director at Sri Lalitha, a leading rice exporter based in the southern Indian state of Andhra Pradesh.
