Search the Internet          Tips  Sites: Finance, Investment

India's rice-export aim may be disrupted by Bangladesh ban

India's plan to export three million tonnes of rice this year was jolted by curbs imposed by Bangladesh on imports of the grain, traders said on Monday.

"Bangladesh had already reduced rice purchases from India after harvesting another bumper crop this year. But a complete ban has forced exporters totally out of the scene," a grains trader at an international trading firm said.

Bangladesh has imposed a temporary ban on imports of rice through land and sea customs stations, except one customs house bordering an Indian state, to stop an influx of rice.

The move sought to protect local growers facing a dip in prices due to the bumper output, a Bangladesh government statement said on Sunday.

Indian traders said Bangladesh imported 1.2 million tonnes of rice in 1999 which fell to 600,000 tonnes in 2000. The imports are likely to be 300,000 tonnes this year due to the bumper crop.

Bangladesh imports rice mainly from its neighbours India, Pakistan and Myanmar. It produced 24.9 million tonnes of foodgrains in 1999-2000 season against 21.8 million tonnes a year before.

Traders said Bangladesh was a good market for Indian rice exporters due to lower freight, and they would now have to explore other markets such as in Southeast Asia and the Middle East.

NOT COMPETITIVE IN OTHER MARKETS

"But we are not competitive in other markets at current domestic prices," a Hyderabad-based grains trader said. Thailand and Vietnam are key exporters of rice to Southeast Asian and Middle Eastern countries.

India's state-run grains procurement firm Food Corporation of India sells rice to local traders for exports at Rs 6750 ($143.8) a tonne which is higher than global prices. The grain price in the local market is more than the FCI price.

Global grain prices range from $130-140 a tonne FOB.

The government said in early May it would fix a new price for rice exports, which would not be below Rs 5,650 a tonne, the price at which it is sold to the poor under a government subsidised scheme. The new price is awaited.

"We want rice at a price close to Rs 5,650," said Gurnam Arora, president of the All India Rice Exporters Association. "We have buyers but higher prices are making exports unviable."

India's rice exports may not pick up significantly even at a price of Rs 5,650 a tonne as the grain quality is not very good and there is no new demand in the global market, traders said.

India could export a maximum of 500,000 tonnes of rice in April-September 2001 with a fall in export prices, they added.

The government has allowed FCI to sell three million tonnes of rice for exports in 2001-02 (April-March). It has a total stock of 23.21 million tonnes out of which 11.8 million tonnes is needed as a buffer.

India exported 1.2 million tonnes of rice, including aromatic Basmati rice, in 2000/01 against 1.8 million tonnes a year ago.

Tell us what you think of this report