Rice exports from India may rise on Thai supply cut

India, the world’s second-largest rice producer, may ship 2 million tonne before March as African buyers seek cheaper alternatives to supplies from flood- hit Thailand, according to KRBL, an exporter.
“Today the cheapest rice is available in India, and that is why there is a lot of demand,” Anil Kumar Mittal, chairman of the New Delhi-based exporter, said in a phone interview. “Indian supplies of white rice are at least $135 a tonne cheaper than those from Thailand, the biggest exporter,” he said.

Rising supplies from India may ease rice prices in Chicago, which have climbed 20% in the past year, and cap global food costs monitored by the United Nations that increased 16% in September from a year earlier. Rice is the best- performing grain this year on concern that damage to crop from the worst floods in Thailand in 50 years and dry weather in Texas in the US will shrink global supplies.

“Indian exporters have signed contracts to ship about 8,00,000 tonne of the grain after the government scrapped restrictions on exports last month,” Prem Garg, managing director of Shri Lal Mahal, an exporter, said.

Buyers from African countries were signing deals to import Indian rice at prices ranging from $350 a tonne and $500 a tonne, free-on-board basis, he said.

India, which banned private companies from shipping non-basmati rice in April 2008 amid a global food crisis, partly lifted that restriction in July. “Exports may total 4 million tonne in the year that began on April 1,” Vijay Setia, president of the All India Rice Exporters Association, said on September 13.

“Thai exporters are in a dilemma now because when the government purchase program was announced, India hadn’t decided to sell its rice,” said Garg.

Thailand started a government-purchase program this month, at prices as much as 44% above market rates, to boost crop prices and rural incomes. The nation’s Permanent Secretary for Commerce Yanyong Phuangrach said on October 14 that the flooding will have a limited impact on rice shipments, and exports this year will be more than 11 million tonne.

Tropical storms have flooded 62 of Thailand’s 77 provinces, damaging 8.4 million rai (1.3 million hectares), or 14% of rice land, the Department of Disaster Prevention and Mitigation said on Monday. Unmilled rice output may be cut by 3.5 million tonne this year and floods were delaying exports, Korbsook Iamsuri, president of the Thai Rice Exporters Association said on Monday.

“The floods in Thailand may not impact global supplies much as the crop is quite good and they will not have any problem in supplying to buyers,” Garg said. Rough rice for delivery in November traded at $16.46 per 100 pounds on the Chicago Board of Trade. The price touched $16.815 on Monday, the highest level since September 23. Prices will be steady at current levels till December, Garg said.
Bloomberg