Rice exports may drop by up to 1 mt in FY19

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The country's rice exports is likely to reduce by 0.5-1 million tonne (mt) in the current financial year due to a possible reduction in imports by Bangladesh, a report said here.

In last financial year, the country's exports increased nearly 18 per cent year-on-year to 12.7 mt in FY18, due to increased demand for non-basmati rice from Bangladesh, Africa and Sri Lanka.

The imports by Bangladesh are likely to reduce in 2018-2019, as its domestic output rebounds due to a crop recovery and expansion in area sown because of high prices in 2017, India Ratings said in its report here, adding as a result, India's exports could reduce by 0.5 mt to one mt.

The country's exports may also reduce barring a recurrence of floods in Bangladesh, in light of the heavy pre-monsoon rains, the report said.

Bangladesh accounted for around 15 per cent of India's total exports in last financial year, against only one per cent in FY17.

The neighbouring country imported around 3.7 mt of rice between July 2017 and April 2018, which is the highest ever rice import in Bangladesh, as production fell due to flash floods and rice blast attacks, India Ratings said.

Among other major importers, Iran, the largest buyer of India's basmati rice, and Saudi Arabia accounted for around 7.5 per cent and 7 per cent to the total exports, respectively, in FY18.

Exports to Iran are likely to increase in FY19, according to the report.

The rating agency believes the country's export price is also likely to remain competitive compared to Thailand and Vietnam.