Rice Export Revenues to Stay Stable on High Prices
By Sangeetha G
Rice export from India is expected to decline 10 per cent in F24 due to the trade restrictions an higher duties. However, export revenues could remain stable with international prices expected to go up.
Despite a ban on the export of broken rice and imposition of 20 per cent duty on non-basmati rice exports, total rice exports grew by 5 per cent in FY2023. In order to safeguard domestic consumption and control price escalation, the government recently imposed restrictions on the export of non-parboiled rice, which accounted for 30 per cent of the total FY2023 export volume.
However, ICRA anticipates that the export of non-parboiled rice will continue in limited volumes under bilateral arrangements between the government and other rice importing countries, as seen in FY2023 for broken rice. There could be an overall decline of 17 per cent in non-basmati rice exports, as a significant growth in export volumes of parboiled rice expected in FY2024 would part-mitigate the adverse impact on the non-parboiled segment.
Basmati rice export is also likely to grow more than 15 per cent in FY2024. Consequently, ICRA expects total rice exports to decline by only around 10 per cent in the current year. Despite an estimated decline of around 10 per cent in overall rice exports, the revenues of non-basmati rice millers/exporters would remain stable in FY2024 over FY2023 on account of the relatively high realisation in both exports as well as domestic markets.
The higher realisation will come from increased international prices. The average price of exported basmati rice and non-basmati rice increased by 26 per cent and 9 per cent respectively in FY2023. This year the prices are at a decadal high and are set to rally further after India’s move to increase the minimum support price (MSP) for the crop and ban the export of non-parboiled rice.
Going forward, given the recent export restrictions on non-parboiled rice and estimated high food grain inflation globally, international rice prices in FY2024 are unlikely to soften. A deficit in global rice production in FY2024 is also likely to keep international rice prices high.
This article has been republished from The Deccan Chronicle