Problems & Prospects of Rice Export from India

AVERAGE EXPORT PRICE

Data on exact export price of rice is not readily available in this Directorate. However, the average export price per quintal of rice has been worked out year wise for the basmati and nonbasmati rice separately. For the purpose of calculation, total quantity of rice exported and its value realized in rupees have been taken separately for basmati and non-basmati rice and then the value of export divided by the quantity of rice exported to arrive at the average export price of rice per quintal year wise for basmati & non-basmati. Average export price thus worked out has been discussed in this chapter. Average export price of basmati and non-basmati rice during 1992-93 to 2001-02 are given in Table-7.

Basmati Rice It is seen from the average export price data given in Table-7 that the export price of Basmati Rice has fluctuated significantly year after year. During 1992-93, average export price of basmati rice was Rs. 2,465 per quintal, which declined continuously year after year up to 1996-97 as compared to 1992-93. Average export price for basmati rice has been worked out to Rs. 2,013 per quintal during 1993-94 and the same has decreased to Rs. 1,957 per quintal during 1994-95. Average export price again increased to Rs. 2,297 per quintal during 1995-96 over previous year price and increasing trend in average export price continued up to 1998-99. During 1996-97, average export price has been worked out to Rs. 2,385 per quintal, which increased to Rs. 2,841 and Rs. 3,140 per quintal during 1997-98 and 1998-99 respectively. However, average export price of Basmati rice declined during the following three years as compared to 1998-99 average export price. During 1999-2000, average export price was worked to Rs. 2,789 per quintal, which came down to Rs. 2,543 per quintal during 2000-01 and it again went up to Rs. 2,762 per quintal during 2001-02. The reason for fluctuation in average export price of Basmati rice is attributed to different quality and quantity of rice exported to different countries during different years. A particular country may import one year a particular quality/grade of rice and the same country may import another quality/grade of rice during next or subsequent years. Thus, different quality and quantity of rice exported to different countries at different export price rate may probably be the reason for fluctuation of average export price of Basmati rice.

Non-Basmati Rice Average export price data given in Table-7 reveals that in case of Non-Basmati Rice, almost same trend of fluctuation in average export price is seen as in case of Basmati Rice.

During 1992-93, average export price was worked out to Rs. 684 per quintal for Non-Basmati Rice, which declined to Rs. 399 per quintal during 1993-94. However, average export price increased to Rs. 759 per quintal during 1994-95 over previous year and increasing trend in average export price continued up to 2000-01 as compared to 1994-95. Average export price was worked to Rs. 819 per quintal during 1995-96, which increased to Rs. 968 per quintal during 1996-97 and slightly decreased to Rs. 939 per quintal during 199798 over previous year. During 1998-99, average export price increased to Rs. 1,009 per quintal over previous year and continued to increase in linear order to Rs. 1,070 per quintal and Rs. 1,139 per quintal during subsequent two years of 1999-2000 and 2000-01. There was a sharp declined in average export price to Rs. 864 per quintal during 2001-02 over previous five years. The reason for fluctuation in average export price of non- basmati rice could be the same as discussed above in the case of Basmati Rice. India to other countries

India is looking at China, Mexico and the Commonwealth of Independent States (CIS) as new markets for its basmati rice, with a view to expand its share of global trade. India exported 2.2 million tonnes of basmati rice to more than 100 countries in the 2010-11 fiscal. The countrys share of the global market for basmati rice is 60 per cent, while Pakistan accounts for the remaining 40 per cent. This high quality rice is mainly grown in these two countries. India is looking for new international markets for its quality basmati rice in China and Mexico, a senior official of Agricultural and Processed Food Products Export Development Authority (Apeda) said. CIS countries like Russia, Tajikistan, Turkmenistan, Uzbekistan, Ukraine, etc, could be another destination for basmati rice, he said. Basmati rice exports last fiscal were 8 per cent higher than the year-ago period, when the country shipped 2.02 million tonnes overseas. In India, it is grown mainly in Punjab, Haryana, Uttar Pradesh and Uttarakhand. Annual production now stands at around 4.5 mt. The official said that basmati rice fetches $1,100 per tonne in international markets. Indian basmati is sold to over 100 countries, including the US, UK, UAE, Iran, Kuwait and Europe.

Competitor analysis : Aromatic basmati rice exports from India may dip by 10 per cent to 1.8 million tonnes in the 2010-11 fiscal due to the increased competition posed by neighbouring Pakistans produce in Europe, a trade body said on Monday. Total basmati rice export in both volume and value terms are expected to fall by 10 per cent from a year earlier. Exports volume may fall to 1.8 million tonnes, All-India Rice Exporters Association President Vijay Setia told reporters. Mr. Setia attributed the slump in exports to growing competition from neighbouring Pakistan in Europe due to pesticide concerns. Indian farmers are spraying pesticide even after the flowering stage of the crop. And the EU is objecting to this, he said. In addition, Indian exporters are not keen to export basmati to Iran -- one of their biggest markets -- due to delays in receiving payment for shipments on account of sanctions imposed by the U.S. and United Nations against the Middle East nation over its suspected nuclear programme, said Mr. Setia. Iran payment is coming very slowly as it is being routed through Dubai. As a result, it is affecting our market and realisation, he said. In the 2009-10 fiscal, the country shipped 2.01 million tonnes of basmati rice, mainly to the UAE, Iran, Saudi Arabia, Europe and the US. The export realisation from overseas shipments of Indian basmati was Rs. 10,838 crore last fiscal, he said. In terms of value, exports were down by Rs. 2,500 crore in the review period. The value realisation was $ 1,060/tonne in the first ten months of the current fiscal, compared to $ 1,160/tonne in the same period last year, it said. Meanwhile, the agri-export promotion body APEDA had recently said Indias total basmati rice exports in the entire 2010-11 fiscal are unlikely to be lower than last year, though a decline in shipments was seen for a brief period in 2010. According to the crop survey conducted by Apeda, total basmati rice production is estimated at 7 million tonnes in the 2010-11 crop year, almost 10 per cent higher than the output of 6.4 million tonnes recorded in the previous year.