Indian Rice Exporters Distress Over Vietnam Price Pressure
Last updated on August 9th, 2021 at 10:02 am
Rice exporters are sweating it out for the wrong reasons. The Vietnamese buyers are somehow asking for heavy discounts. The reason for this is that local production has risen and local prices have dropped. So, the Indian export isn’t looking that much more lucrative at the moment.
According to M. Madan Prakash, President, Agri Commodities Exporters Association (ACEA) “Initially, our shipments kept lying unclaimed due to Covid restrictions. Then, Vietnam started importing our rice for making wine and feed for the first time in decades last fiscal. It bought more of 100 percent broken rice that are priced lower than other rice varieties. These are used in making wine.”
There is also a rumor doing rounds that Vietnam could have purchased from India and sent everything to China. China has initially imported 3.3 lakh tonnes valued at ₹756.20 crores directly from India during the last fiscal.
Most of the rice shipments have gone from Kolkata, while all the consignments under dispute have gone from the eastern coast. Freight charges are higher elsewhere, therefore the eastern coast has become a better option to pick the exports from. Vietnam has not been buying from India consistently. Now that they are buying, they are dominating the price, much to the distress of Indian exporters.
Volumes under dispute are between two three lakh million tons. The official figures could go upto 40,000-50,000 tonnes.
Over the last two fiscals, Indian rice exports have been helped by record productions during the last two seasons (July -June).
According to the Ministry of Agriculture and Farmers Welfare, rice production in 2019-20 was 118.87 million tonnes (mt) and for the last season, it has been estimated at 120.32 mt.
Besides, the Food Corporation of India also carried high inventories. In April last year, it carried 32.23 mt of rice and 25.23 mt of paddy that can yield 16.98 mt of rice. This April, it had 29.11 mt of rice and 26.22 mt of paddy that can yield 17.65 mt of rice.
The stocks were against the mandatory norm for FCI to have 11.5 mt of rice as operational stock and two mt as strategic reserve.