Prices of Indian parboiled (boiled) rice have increased by over $50 a tonne over the last couple of weeks on export demand following the government’s ban on shipments of non-basmati white (raw) rice.
Exporters were quoting prices between $460 and $500 a tonne (free-on-board), though some are wary of signing new deals as prices are swinging up and down on a daily basis.
On the other hand, trade sources said at least 1.7 lakh tonnes of parboiled rice are being shipped out of the Kakinada port this week, while many vessels have booked to call at the port to load rice shipments.
Thai continues to gain
The US Department of Agriculture (USDA) in its report on Thailand rice said export prices for all grades of rice increased by 5-10 per cent due to the strengthening of the baht and panic buying in the global market following India’s white rice shipments ban.
Thai rice export prices continue to increase with prices ranging between $15 and $45 a tonne higher than Vietnamese rice, compared to the typical price difference of $15-25/tonne, the USDA said.
‘Parboiled rice is quoted at $475 a tonne. There is good demand for it from buyers of white rice, who are trying to shift since white rice prices are ruling over $550 a tonne,’ said Delhi-based exporter Rajesh Paharia Jain.
‘Parboiled prices were up until last week. They have cooled now to $460 as supply has increased. The downtrend will gain further over the next week,’ said BV Krishna Rao, President, The Rice Exporters Association (TREA).
Daily price change
‘F.o.b prices have touched $500 a tonne for parboiled rice. The market has gone crazy. Every day, prices are changing due to which not many transactions are taking place,’ said VR Vidya Sagar, Director, Bulk Logix.
‘Not many are willing to sign contracts with overseas buyers as they could get caught once prices change if they have commitments to meet,’ said a trading source, without wishing to identify.
Sagar said he wasn’t signing any deals as prices are changing on a daily basis. ‘Parboiled rice is quoted at ?40,000 a tonne ex-mill domestically,’ he said.
‘We got parboiled rice at ?37,100 a tonne. Export prices till top $500 a tonne over the next 7-8 days,’ said Jain. ‘We are seeing a shift from white rice as buyers are finding parboiled cheaper,’ he said.
‘There will certainly be a shift to parboiled rice but not fully. The current demand could be to test the variety, but not all will get converted to parboiled,’ said TREA’s Rao.
There could be a 2-3 million tonnes (mt) of shift from white rice to parboiled, while Thailand and Pakistan could gain 2-3 mt of white rice market share. ‘Another 2-3 mt could be lost out to demand restriction,’ he said.
On July 20, the Government caught the global rice market by surprise, banning exports of white rice as part of its efforts to control rising foodgrain prices. The move is also seen as a measure to overcome any supply shortage.
Over the last two years, India has exported at least 17 million tonnes of non-basmati rice. On the other hand, rice stocks in the Central pool maintained by the Food Corporation of India (FCI) dropped to a seven-year low of 25.34 million tonnes in July. The agency has an additional 23.3 mt of unmilled paddy (15.72 mt of rice). The ban could result in rice shipments dropping by at least 6-7 mt.
This article has been republished from The Hindu Business Line