Robust demand boosts Indian rice export prices to 3-year peak

Robust demand from across Asia and Africa sent Indian rice export prices to a three-year peak this week, while Vietnamese exporters struggled to ship due to high freight prices fuelled by a container shortage, reports Reuters.

India's southern state of Andhra Pradesh will use a deepwater port to export rice for the first time in decades amid a global shortage of the grain, according to a government order seen by Reuters, which could raise shipments this year by a fifth.

The order, issued late on Wednesday, allows Kakinada Deep Water Port to handle rice until more capacity is created at the adjoining Anchorage Port.

India mainly exports non-basmati rice to Bangladesh, Nepal, Benin and Senegal, and basmati rice to Iran, Saudi Arabia and Iraq.

Bangladesh, which has been grappling with limited supply, also bought more than 110,000 tonnes from India with more on its way, a senior Food Ministry official said.

The Indian government blamed the congestion on a surge in demand, driven by production shortfalls in other rice-producing countries.

Thailand and Vietnam are the other big suppliers, but their production has fallen in recent months because of excessive rains or drought, sending their prices to multi-year highs.

More shipments from the world's biggest rice exporter could cool global prices.

India's rice exports this year could rise to a record 16 million to 17 million tonnes from last year's 14.2 million, Rao said.

The government also thinks rice exports, excluding the premium basmati variety, could rise by 2 million to 3 million tonnes this year, said Pawan Agarwal, special secretary, logistics, at the federal Ministry of Commerce and Industry.

Top exporter India's 5 per cent broken parboiled variety were quoted at $402-$408 per tonne, its highest since May 2018.

"Along with traditional buyers, China and Vietnam are also buying from India. There's huge demand," said an exporter based at Kakinada in the southern state of Andhra Pradesh.

Meanwhile, Vietnam's 5 per cent broken rice prices rose to $510-$515 per tonne from $505-510 last week on thin supply.

"Trade is very slow as most of us are already off for the Lunar New Year holiday, and buyers have suspended signing new contracts waiting for the new harvest," a trader based in the Mekong Delta province of An Giang said.

The harvest of the winter-spring crop, the largest of the year, will peak in late February or early March, traders said.

Shipments were also being hampered by high freight charges due to a container shortage.

"Shipments to regional ports have been facing delays, and we can't even book ships for European and African ports," a trader said.

Thailand's 5.0 per cent broken rice prices jumped to their highest level since early April at $535-$564 per tonne, amid concerns over low supplies, while exporters eyed a tender from Iraq, traders said.

Iraq's trade ministry said it intended to procure rice from international suppliers this week.