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Weak rupee, strong demand likely to propel rice exports

Higher realisation, rise in contracted amount bode well for India?s retention of top slot as world?s biggest exporter

Rising global demand and the rupee?s devaluation against the US dollar are having a positive impact on the country?s rice exports, estimated at more than R30,000 crore annually.

Commerce ministry officials and exporters are bullish in the wake of higher price realisation for the India?s rice, particularly Basmati shipments, in the current fiscal. Even in case of non-Basmati rice, there has been an increase in the contracted amount in the current fiscal.

This rise in shipments is likely to keep India?s top rice exporter status intact, helping it beat Vietnam and Thailand for a third consecutive year.

According to the latest commerce ministry data, realisation from Basmati exports during April-June increased a whopping 62% whereas rice contracted for exports during April-August saw a jump of 14% over the same period last year.

During April-August, 16. 87 lakh tonne of Basmati rice was contracted for exports against 14.75 lakh tonne in the same period last year. Even the average price realisation during April-August was $1,362 per tonne against $1,030 per tonne during the same period last year

?As most of our Basmati rice exporters have forward contracts with importers, we will get to know the quantum of price realisation only over the next few months. However, due to rising global demand, our Basmati rice exports during the current fiscal would see a rise of more than 10%,? MP Jindal, president, All India Rice Exporters Association (AIREA), told FE.

Together with non-Basmati rice shipments, India’s rice exports gained in value terms during April-July, 2013.

?As most of India?s Basmati exports are settled in US dollars, profitablity of companies will improve. Indian Basmati rice always commanded higher price in the global market. The devaluation of the rupee against the US dollar would help futures contracts,? R Seshadri, director, Tilda Riceland, one of India?s biggest Basmati rice exporters said.

Rice exports have been rising steadily since the government lifted a 4-year-long ban on non-Basmati rice exports in September 2011.

India has emerged as the world?s largest exporter of rice in 2011-12 and 2011-12, with shipments of about 10 million tonne. Thailand exported 6.9 mt and Vietnam sold 7.8 mt overseas.

Apart from Iran, other key destinations for Indian Basmati are Saudi Arabia, the UAE, Kuwait and Iraq.

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First published on: 05-09-2013 at 02:50 IST
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