It is going to be challenging times for Indian rice exports in 2019 with China emerging as an export giant and countries like Pakistan, Thailand and Vietnam hampering the market for Indian rice, says a market report by Cogoport, a online logistics company
The report says that, countries like Egypt, China, Mexico, Malaysia, Indonesia and Philippines could be the new markets for Indian rice and before other countries extend their market share, Indian exporters must establish trade relationships in the new markets.
According to the report, global rice production is expected to see a decline in 2019 due to projections of lower crop in the United States, North Korea, and Thailand. “India is expected to see a drop in non-basmati rice exports while Basmati rice exports will grow but at a slower rate in 2019,” says the report.
Nikhil Singh, chief executive officer, Rajputana rice, says, “Rice exports can be challenging. Exporters face liquidity issues as payment take months to come and competition from high quality and cheaper Pakistani and Thai rice is increasing.”
Another exporter, Vishal Agrawal, chief executive officer, Saya Overseas, adds: “We used to ship 60-70 containers monthly. Now because of the challenges we’re moving about 40 to 50. The economy is slowing down and there is tough competition from other countries. Pakistan, Thailand and Vietnam are offering better rates. There are losses because of defaulters in this industry. Competition among rice exporters is also increasing. Every other manufacturer is now becoming an exporter and while manufacturing exporters get the benefit of subvention scheme, mill exporters do not.”
In light of the challenging times ahead for the rice industry, Kunal Rathod, co-founder and head of growth, Cogoport said, “Indian exporters face stiffer competition now as China turns into a low-cost rice exporter while higher tariffs on non-basmati rice threatens India’s chances to export to Bangladesh. Indian rice exporters need to look for potential new markets such as Mexico which is relying less on supplies from the US.
“Countries like Egypt where availability of affordable Asian rice can fill tight domestic supply gaps could also be potential new markets whereas countries like China, Malaysia, Indonesia and the Philippines continue to be major rice importers and can be targeted,” he added.
Rakesh Kumar Singh, vice president, The Rice Exporters Association, an industry veteran with 45 years of experience in the rice trade, added, “We remain a strong player in rice exports to West Africa. We should now be targeting new markets like China, Malaysia and the Philippines. To avoid payment challenges, exporters should take an advance of 10-20 per cent and the balance on fax or through the bank. If you have some money upfront, the buyer will not default.”
Cogoport is a Mumbai based online logistics company that launched its digital freight marketplace in 2017. The company’s online platform has over 27,000 registered users who can select their best shipping solution in minutes, thereby reducing the time and cost previously spent on booking shipments.
The company offers customers a comparative list of transparent pricing from more than 60 major international shipping line providers on city pairs across the globe. It also works with more than 40 non-vessel operating common carriers and 300 freight forwarders.