India's basmati rice exports to fall as Pakistan's surge

KRBL

29/02/2024 10:25

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      India's exports in 2024 to drop from last year's 4.9 mln T
    

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      Pakistan sells at lower price as production recovers 
    

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      Buyers wait for prices, freight to come down
    

  
    By Rajendra Jadhav
       MUMBAI, Feb 29 (Reuters) - India's basmati rice exports
are likely to fall in 2024 after nearing a record high last
year, as rival Pakistan is offering the grain at competitive
prices amid a rebound in production, industry officials said.
    India and Pakistan are the leading exporters of the premium
long-grain variety of rice, famous for its aroma, to countries
such as Iran, Iraq, Yemen, Saudi Arabia, the United Arab
Emirates, and the United States.
    India's exports of basmati rice surged 11.5% from a year
earlier to 4.9 million metric tons in 2023, just shy of the
record high of 5 million tons hit in 2020, on lower supplies
from Pakistan and stocking efforts by importing countries,
industry officials said.
    Basmati rice shipments helped the world's biggest rice
exporter to garner a record $5.4 billion in 2023, up nearly 21%
from the previous year, because of higher prices, government
data showed.
    "Last year, buyers were hustling to stock up when Pakistan
was facing production issues. This year, however, Pakistan
offers lower prices than India due to increased production,"
Vijay Setia, a leading exporter based in Haryana state of India,
said.
    Islamabad's total rice exports could jump to 5 million tons
in 2023/24 financial year, up from the last year's 3.7 million
tons, Chela Ram Kewlani, chairman of Rice Exporters Association
of Pakistan (REAP) said last month.
    The depreciation of the Pakistani rupee has made Pakistan's
exports more competitive, according to Akshay Gupta, head of
bulk exports at KRBL Ltd  KRBL.NS .
    Meanwhile, lower export demand amid an estimated 10% rise in
India's basmati rice production has started pulling down basmati
prices in that country, said Gupta.
    Iran, the biggest buyer of Indian basmati rice, slashed
purchases by 36% in 2023, but higher shipments to Iraq, Oman,
Qatar, and Saudi Arabia offset the shortfall, according to data
compiled by India's Ministry of Commerce and Industry.
    Indian exports had lost momentum in September and October as
 the government imposed minimum export price (MEP) on basmati
rice, but they quickly recovered, said a New-Delhi-based
exporter.
    In August, India imposed the MEP on basmati rice shipments
at $1,200 per ton, exceeding prevailing market rates, before
lowering it to $950 in October.
    However, exports began faltering again in January, and may
decline further in the near term as buyers delay purchases due
to increased freight costs caused by disruptions in shipping via
the Red Sea, exporter Vijay Setia said.
    "Buyers are holding ample inventory; there's no need for
them to rush," he said.
    
    

 (Reporting by Rajendra Jadhav; Editing by Mrigank Dhaniwala)
 ((rajendra.jadhav@thomsonreuters.com; +91-22-68414378 ; https://twitter.com/Rajendra1857))