After exporting a record 17.71 million tonne of rice in 2020-21, an increase of 86% over the previous year’s 9.5 million tonne, India is set for another good season of exports in 2021-22 as well, despite high freight costs.
The demand for non-basmati rice increased to a record high of 13 million tonne (valued at $4.796 billion) last year as more countries purchased the cereal amidst supply issues in Asean region and the Covid pandemic to ensure food supplies. Similarly, basmati rice exports had touched 4.63 million tonne, valued at $4 billion. Although exporters have expressed concern that there could be a slowdown in purchases due to high freight costs from African buyers, India still remains the most competitive in terms of pricing as compared to the other countries. B V Krishna Rao, president, Rice Exporters Association (REA), said that exports for the current season of 2021-22 have begun in a small way.
“Since the freight costs are high, there is a preference for shorter routes and commodities such as steel or pulses. Not many would like to take long route to Africa and get stuck for longer periods,” he pointed out. Freight costs across the globe have more than doubled over the past year. African nations are among the biggest buyers of the Indian non-basmati rice. Africa as a market accounted for 54% of India’s $4.79 billion non-basmati rice shipments during 2020-21. African countries imported rice valued at $2.59 billion during 2020-21 and Benin was the largest importer valued at $443 million.
According to Rao, rice prices in Vietnam and Pakistan, which have been losing market share, have softened. “However, India still remains the cheapest supplier in the world today. Rice prices in Vietnam and Pakistan cost between $420 per tonne to $430 per tonne, while India still offers rice between $360 per tonne to $400 per tonne and therefore buyers will keep turning towards India,” he said.
China has also turned out to be another major buyer, Rao said. China rice purchases from India, mainly the non-basmati type, exceeded $100 million for the first time. Compared to the previous year, India’s total rice exports, including basmati, to China touched 3,31,989 tonne during 2020-21 compared with 747 tonne the previous year. In value terms, rice exports were valued at $104.07 million compared with $0.45 million.