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Rice Exports Profitable for India

By News Canvass | Apr 04, 2022

India’s Agriculture and Processed Food Products are expected to exceed the target of $23 billion in FY 22. Spike in shipment of Rice, Wheat, Fresh & Processed Fruits and Vegetables, And Livestock Products has made this possible. India has been the world’s largest rice exporter in the last decade — export earnings stood at a record $8.7 billion in FY21 and could cross $9 billion this fiscal. India exports rice to more than 90 countries.

Rice – The Staple Food of India
  • Rice is one of the chief grains of India. Moreover, this country has the largest area under rice cultivation. As it is one of the principal food crops.
    It is, in fact, the dominant crop of the country.
  • India is one of the leading producers of this crop. Rice is the basic food crop and being a tropical plant, it flourishes comfortably in a hot and humid climate. Rice is mainly grown in rain-fed areas that receive heavy annual rainfall.
  • That is why it is fundamentally a kharif crop in India. It demands a temperature of around 25 degrees Celsius and above, and rainfall of more than 100 cm.
  • Rice is also grown through irrigation in those areas that receive comparatively less rainfall. Rice is the staple food of eastern and southern parts of India.
Nutritional value of Rice
  • Rice is a nutritional staple food which provides instant energy as its most important component is carbohydrate (starch). On the other hand, rice is poor in nitrogenous substances with average composition of these substances being only 8 per cent and fat content or lipids only negligible, i.e., 1 per cent and due to this reason, it is considered as a complete food for eating.
  • Rice flour is rich in starch and is used for making various food materials. It is also used in some instances by brewers to make alcoholic malt. Likewise, rice straw mixed with other materials is used to produce porcelain, glass, and pottery. Rice is also used in manufacturing of paper pulp and livestock bedding.
  • The variability of composition and characteristics of rice is broad and depends on variety and environmental conditions under which the crop is grown. In husked rice, protein content ranges in between 7per cent to 12per cent. The use of nitrogen fertilizers increases the percentage content of some amino acids.

Medicinal Value

  • The immense diversity of rice germplasm is a rich source for many rice-based products and is also used for treating many health-related maladies such as indigestion, diabetes, arthritis, paralysis, epilepsy and give strength to pregnant and lactating mothers. Ancient Ayurvedic literature testify the medicinal and curative properties of different types of rice grown in India.

Largest Exporter

According to data reports available India’s rice exports crossed $8.67 billion in the first 11 months of FY22. India has been the world’s largest rice exporter in the last decade — export earnings stood at a record $8.7 billion in FY21 and could cross $9 billion this fiscal. India exports rice to more than 90 countries.

  • 70% of the total value of cumulative exports of long grain aromatic rice is contributed from Two Basmati Rice Varieties. These Varieties are developed by Indian Agricultural Research Institute (IRAI).

  •  The exports value was Worth Rs 2.38 lakh crore between 2010 and 2019, thus bringing a major benefit to Indian farmers. India exported on an average 3.74 million tonne (mt) of Basmati rice annually during the stated period, of total production of around 5 mt.

  • Countries like Africa Nigeria and Cote d’Ivoire, and Asia, including China and Nepal are the major importers of Rice from India. The additional demand has been predominately supplied by India, which has more than doubled its exports since 2019. While shipments for the next largest exporters, Vietnam and Thailand, are expected up for.

  • There is a global demand for low priced rice and Prices for Indian Rice has always below compared to other exporters for 2 years.

  • Finally, India has invested significantly in its deep-water ports, enabling it to ship in bulk in addition to the typical containers. Top importer China has been purchasing significant quantities of Indian broken rice to supplement feed rations. Ironically, Vietnam, a large exporter, has also been importing significant quantities of India’s broken rice.

  • India’s ability to supply both parboiled and regular white rice at competitive prices will also propel exports to Sub-Saharan Africa where imports are projected to grow. Indian fragrant basmati rice will continue to dominate the global market, particularly in the Middle East.

Logistical Bottleneck

  • Indian Rice is cheaper compared to other countries supplies like Thailand and Vietnam and also the global demand for rice has scaled record highs.
  • India rice export prices sustain steep discount to Southeast Asian prices since early 2020. However, limited infrastructure at Kakinada Anchorage, India’s main rice port, led to persistent congestion and lengthy loading delays last year, prompting some buyers to switch suppliers.
  • India was offering a discount of more than $100 per tonne over other exporters, but much of the discount was wiped out by higher demurrage charges tied to the delays.
  • To ease the congestion, the southern state of Andhra Pradesh allowed the use of an adjoining Deep water port at Kakinada for rice shipments. Despite extra port capacity, Kakinada’s loading rate still lags well behind Southeast Asian ports due to a lack of dedicated rice-handling infrastructure.
  • In Kakinada, it takes nearly a month to load around 33,000 tonnes of rice from the time its dropped. In Thailand it takes only 11 days for the same quantity.

Challenges Becomes an Opportunity for India

Though new opportunities are opening up for Indian rice exporters, especially for non-basmati, they are currently keen on fulfilling their contracts following logistics hurdles. Logistics in rice exporters has emerged as the biggest challenge.
Even though this challenge exist this year, rice exports are expected to touch US$9.5 billion, accounting for half of the global rice export market.

Non-Basmati rice shipments are likely to record US$5.8billion, according to official data. In the April to November 2021 period, export of agricultural products, including marine and plantation, amounted to $31.05 billion, up from $25.2 billion in the year-ago period.

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