India is one of the biggest producer & exporter of rice in the world, and its exports are expected to rise by 42% and jump to 14 million tons this year increasing by 9.9 million tons from last year.
The country is being benefitted because of two major reasons as the shipment from rival countries has been reduced on the top of that INR is depreciating with a sharp 3% decline against USD till now. Higher load from India could cap the global prices resulting in the reduction of countries inventories and limiting Indian state stockpile purchases from farmers.
Everything is not smooth in Thailand, another top exporter of rice in the world. It suffered through a drought affecting the rice crop as a whole, and its shipment is expected to fall to 6.5 million tons, reportedly it would be a 20 year low for the country. As far as prices are concerned on the 5% broken parboiled segment, India was offering rice at FOB $380 per ton while Thailand was offering the same at $490 per ton, according to Indian Dealers who also suggested that Unlike other Countries, India has a massive rice surplus and the exports won’t create a shortage in the local market.
India exports Non-Basmati Rice to Bangladesh, Nepal, Benin & Senegal while premium basmati rice to Iran, Iran & Saudi Arabia. The demand for non-basmati rice has been increasing continuously this year, mainly from South Africa due to attractive prices, also because China has also cut exports to the country. Thus, Indian export in the non-basmati rice segment may double from last year, reaching 9.5 million tons with some importing countries like Brazil, Saudi Arabia & Philippines.
If this trend continues, India might be the top exporter of the commodity for the year. Even though the INR depreciation has been a factor in the growth, the primary factor remains the volume of production that catered the domestic as well as International Demand.