Rice holds hope for India in global mart

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Mumbai, Nov 28: India is sitting on an advantageous position at the global level. If prices continue to rise, India is likely become a greater international market player in rice. Currently, India maintains strong market share in specialty markets, such as parboiled and basmati.

However, Indian exports that have shrunk on relatively smaller supplies and a lack of government export subsidies is a cause of concern for rice exports. In India, the lack of government export subsidies has limited the country’s participation in the regular international white rice market.

In the global market, China is expected to remain on the sidelines as a major exporter, and India’s current policy is to ban subsidised exports. As a result, Thailand has rather easily stolen market share from these suppliers, particularly in the Middle East and Africa.

India’s rice exports from January through October 2004 are estimated at around 2.3 million tonne. Based on official statistics, India’s rice exports from January through June 2004 totaled around 1.5 million tonne, including 610,000 tonne of basmati rice. July-October 2004 exports, based on shipment data provided by a private shipping agency, are estimated at around 800,000 tonne, taking January - October 2004 exports to around 2.3 million tonne.

According to a quarterly report by the United States Department of Agriculture (USDA), global consumption level continues to outpace production, US exports are robust, the gap between Asian and US prices has narrowed significantly and is expected to narrow more.

In the report on World Situation and Outlook, USDA has stated that despite a 9.0 million tonne year-to-year increase in global production, 2004-05 global consumption is forecast to continue to outpace production for the 4th consecutive year thereby drawing down global ending stocks. Ending stocks are forecast to fall nearly 17% from 2003/04,the lowest level since 1983-84.

Global Trade
Total world trade for the trade year 2005 is expected to fall by nearly 1.0 million tonne last year as traditional importers are expected to remain on the sidelines. While the Philippines and Nigeria are forecast to have higher production, the governments of Indonesia and Turkey continue to restrict imports given ample domestic supplies.

However, should bad weather negatively impact production in any of these traditional markets or should China’s demand for regular, non-fragrant white rice increases, import demand could surge. Further, with major exporters’ supplies dwindling on 2004 demand, global prices could jump significantly. Already, over the past quarter, we are seeing global prices strengthen.