Indian rice set to profit from Vietnam's woes
CALCUTTA - A continuous fall in the value of the rupee and the lowering of Vietnam's export target in the wake of a setback in the summer-autumn crop are boosting India's rice export prospects in the season to March 2002.
According to trade officials, India has so far bagged contracts for over 500,000 tonnes of rice and more than half of the contracted amount has been shipped.
"We understand that Vietnam has cut the rice export target by 500,000 tonnes to 3.5m tonnes for the current year. This has triggered a rise in the price of Vietnamese rice. As the Vietnamese traders are trying hard to get supplies at the right price to fulfil their export commitments, the farmers are sitting on stocks in expectation of higher prices," said an Indian trade official.
Because of the tight supply situation, many of Vietnam's regular customers are turning to Thailand, India and Burma for rice procurement.
The resultant high level of enquiries has led Thailand to revise the current season's export forecast upwards by 400,000 tonnes to 6.8m tonnes. Thailand, Asia's leading rice exporter, sold 6.6m tonnes in the world market last year.
Officials think the Asian rice market could also be supported by the high level of buying by Indonesia, the Middle East and several African countries. And traders are assessing the impact of a fairly prolonged spell of dry weather on the Cambodian rice output.
"The trade outlook is favourable enough for India to achieve the export target of 3m tonnes in 2001-2002," said an official of Bharat Chamber of Commerce.
Moreover, the Food Corporation of India (FCI), a government procurement agency, is releasing raw and parboiled rice on to the world market at highly competitive prices. Only Burma is offering rice at better rates than India.
"We had a disastrous experience last year when, because of the wrong pricing policy, India could only export about 10 per cent of the 2m tonne target," the Chamber official said. "The burden of foodgrain stock of over 60m tonnes, including nearly 23m tonnes of rice, has led India to release FCI stocks for exports at realistic prices this year."
By Kunal Bose - The Financial times - October 11, 2001.
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