Indian non-basmati rice players have spotted export opportunities amid the unfolding Covid-19 crisis across the globe, especially in Southeast Asian and African nations.
The failure of non-basmati paddy crop in Vietnam and Thailand, coupled with major producing nations' attempt to buffer stocks to deal with the uncertain Covid-19 situation, has presented a lucrative playground for Indian exporters.
“Given all these factors and the fact that India currently has three times the rice buffer stock, we have a big opportunity to tap export destinations,” said Rajiv Kumar, executive director, The Rice Exporters Association (TREA). He said the central government should give incentives to exporters, so that their benefits could accrue to domestic players.
“Last year, non-basmati rice exports had come down by nearly 25 per cent, resulting in a huge stockpile. The current year looks great for exporters,” he said, adding that export contracts have been signed with Indonesia, Malaysia, etc. Similar opportunities exist in African nations, including Nigeria.
A major debilitating factor is a ban on paddy movement in Andhra Pradesh and this is impeding exports from Kakinada port, which accounts for 35-40 per cent of annual rice shipments. “While there are other logistical issues related to the transportation of commodities owing to the lockdown, the ban on the free movement of paddy is a big negative since Kakinada is the anchorage port for rice consignments,” he informed.
Normally, paddy from the neighbouring states is brought for milling in Andhra Pradesh and subsequently taken to ports for export.
While Indian non-basmati rice exports are valued at nearly Rs 22,000 crore, these had gone down considerably last year following the withdrawal of a key tax incentive, which made the domestic exports price uncompetitive. “There is a big opportunity to increase non-basmati rice exports by more than 20 per cent this year, if we are proactive in our approach and the government extends support,” Kumar observed.
The industry has urged the Centre to allow a 5 per cent incentive under the Merchandise Exports from India Scheme, until the Remission of Duties or Taxes on Export Products, a scheme for exporters to reimburse taxes and duties, such as, coal cess and mandi tax, is implemented.