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  1. China finally lifts restrictions, opens its market for Indian rice; LT Foods, Kohinoor Foods, others set to benefit

China finally lifts restrictions, opens its market for Indian rice; LT Foods, Kohinoor Foods, others set to benefit

China, the world’s top rice consumer and importer, has granted phytosanitary clearances to 14 Indian rice exporters, including established ones like LT Foods, Kohinoor Foods and Amira Pure Foods...

By: | New Delhi | Published: December 3, 2016 6:26 AM
Official and industry sources told FE that in a recent communication to the Indian government, China has conveyed that 14 of the 19 rice mills its team visited in September have been cleared for exports to that country — remarkable by China's standards.  (Reuters) Official and industry sources told FE that in a recent communication to the Indian government, China has conveyed that 14 of the 19 rice mills its team visited in September have been cleared for exports to that country — remarkable by China’s standards. (Reuters)

China, the world’s top rice consumer and importer, has granted phytosanitary clearances to 14 Indian rice exporters, including established ones like LT Foods, Kohinoor Foods and Amira Pure Foods, opening its market to the Indian grain after years of restricting such supplies through non-tariff barriers, reports Banikinkar Pattanayak in New Delhi.

Official and industry sources told FE that in a recent communication to the Indian government, China has conveyed that 14 of the 19 rice mills its team visited in September have been cleared for exports to that country — remarkable by China’s standards. The list of 14 exporters that can now ship out to China also includes KRBL, Best Foods, Sarveshwar Foods, SSA International, Ebro India, Pari India, DRRK Foods, Sunstar Overseas, Nature Bio Foods, MR Overseas and United Exports, the sources said. China has been a major buyer of non-Basmati rice from Pakistan, a factor that might have delayed the clearance to Indian exporters, trade analysts have said.

Talks of China allowing Indian rice have gained momentum in recent years, but this is the first time that the giant neighbour has officially cleared such units for non-Basmati rice supplies.

However, against the industry expectations of clearance to almost all the rice units the Chinese team visited between September 18 and 26, only 14 have obtained permission to export.

Officials from China’s Administration of Quality Supervision,Inspection and Quarantine visited these mills, registered with India’s National Plant Protection Organisation (NPPO) and spread across Punjab, Haryana, Uttar Pradesh and Madhya Pradesh. Rice exporters have to be registered with the NPPO to be able to export to China. The neighbour was not allowing Indian rice, citing concerns over the presence of khapra beetle in India’s non-Basmati rice, among others.

The decision comes at an appropriate time for India as it is seeking to reverse a slide in its rice as well as overall farm exports, already hit by a crash in global commodity prices.

According to an International Grains Council (IGC) forecast, China will import as much as 4.1 million tonnes of rice in 2016-17, marginally down from 4.2 million tonnes a year earlier. The IGC has projected India’s exports of rice (both Basmati and non-Basmati) at 10.5 million tonnes for 2016-17, slightly up from 10.4 million tonnes a year earlier but down from as high as 11.8 million tonnes in 2014-15.

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However, with the latest development, the Indian mills that have been cleared will be able to tap the Chinese market and potentially ship out more in 2016-17 than the IGC projections, although it’s too early to firm up a precise forecast on the rise in rice exports, according to senior industry executives. In value term, India’s rice exports dropped to $5.79 in 2015-16 from $7.84 billion a year earlier. Rice exports accounted for 18% of India’s total farm exports in 2015-16. Although China usually consumes non-Basmati rice, it can be tapped for Basmati exports, too, said the executives.

China’s latest communication follows commerce and industry minister Nirmala Sitharaman’s meeting with Chinese ambassador-designate to India in which Sitharaman expressed her displeasure on the delay in issuing phytosanitary clearances by the Chinese team that visited the rice units in September. FE had earlier reported that Sitharaman, in that meeting, also gave “example after example” on how non-tariff barriers are hurting India’s exports to that country. India has been seeking greater access for its farm and food items in the Chinese market.

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