Last Updated : 03 September 2009 at 16:20 IST

India’s rice export curbs to help competitors

SHARE THIS STORY

MUMBAI (Commodity Online): India’s decision to curb the rice export due to lower acreage driven by weak monsoon have helped other competitors such as Vietnam and Thailand, in marking record exports this year with bumper crop.

An expected fall in rice production owing to widespread drought has pushed India out of the rice export market. Meanwhile, the rice prices in the international market are expected to dip as the higher stockpiles that have been accumulated in Vietnam and Thailand would bring down the prices.

Following a government program to support domestic prices and keep farmers in the business, Thailand -the biggest rice exporter in the world - has accumulated record stocks of about 7 million tons of milled rice this year.

But the absence of key exporters such as India in overseas markets will help Thailand find enough demand for its produce and avoid a supply glut. Despite a record harvest of 99.15 million tons last year, India has banned the export of rice, except in the case of premium varieties such as Basmati rice costing $900/ton and above.

Africa consumes more than 22 million tons of rice a year and is heavily dependent on imports for supply. Vietnam, another big producer in Asia, is expected to export a record 6 million tons of rice this year, up from 4.7 million tons in 2008, according to latest data from the International Grains Council.

“Vietnam has had a very good harvest this year - stocks are ample,” said Huynh Minh Hue, general secretary of the Vietnam Food Association.

“We will exceed our previous export target for this year of 5 million tons, on increasing demand from Africa, Malaysia and the Philippines,” Huynh said. “Indonesia has been slow so far, as they have good stocks but there are expectations they may come back to the market later this year.”

Vietnam which offers its 5% broken grade - the best quality rice - at a 30% discount to Thai prices, is expected to be a key beneficiary of India’s withdrawal from the export market, he said.