Rice exports from India are set to swing in the last quarter of this year on a spate in orders after shipments slumped 14% in the last three quarters over high input costs and tepid demand from Bangladesh. Consignments in January are better than the previous year and the trade is likely to attain levels close to the previous year, a senior commerce and industry ministry official told ET.
Exporters have seen a surge in demand from the United Arab Emirates, Iran, Saudi Arabia and the US this quarter. The official said the supply for exports has streamlined after being affected for the last few months of 2018 because of assembly polls in some states. A bumper yield in Bangladesh also took a toll on Indian exports, he said.
The 5% subsidy on export value extended to non-basmati rice under the Merchandise Exports from India Scheme (MEIS) in November helped in the recovery of trade, but margins remained thin, exporters said. Raw material (paddy) prices are still high as most farmers are inclined to sell to the state agencies in states, including Chhattisgarh, said P Bhaskara Reddy, promoter of Kakinada-based Sri Chitra Agri Exports. He said the exporters hope that the scheme will be extended beyond March 26 and the incentive doubled to 10% under MEIS to complement the shrinking margins.
The announcement of higher price assistance by political parties just ahead of the harvesting season in the run-up to the assembly polls had spiked government procurement and dampened private purchase in states like Chhattisgarh where the procurement price was higher by 60%.
Source: Economic times.indiatimes