Cheap Rice In Demand Abroad

Foreign demand for lower grades of Indian rice increased this week as buyers signed contracts in anticipation of further price rises at the end of the season, traders said yesterday.

"Buyers are interested in huge quantities of 100 per cent broken and parboiled rice," a senior official in a leading New Delhi foodgrains export firm said. "Due to the fag end of the season, they (buyers) expect prices to increase further as availability would fall." Traders said 5 per cent broken parboiled rice was quoted at $277 per tonne FOB and 10 per cent was quoted at $167-270 per tonne.

 

Exporters quoted 100 per cent broken non-Basmati rice at $180 per tonne.

The demand for 100 per cent broken rice was mainly from West African countries, said Rashmi Bhimjayani, a leading Bombay foodgrains exporter. Traders said the export demand for higher grades of non-Basmati rice was thin as good quality rice was not available with the season coming to an end. Sowing for the new rice crop normally starts in mid-June.

"Importers know that good quality rice in huge quantities is currently not available plus the prices are high," said one exporter. Traders said 5 per cent broken non-Basmati was quoted at $315 per tonne FOB, 10 per cent at $295, 15 per cent at $275-285 and 25 per cent at $265-270 per tonne.

Analysts said sowing of the new rice crop was about to begin in all the states but the progress of monsoon rains had not been "satisfactory" in the southern and central states. "The onset of the monsoon is weak and the progress tardy," said one Bombay-based commodity analyst who asked not to be identified.

The southern states of Kerala, Karnataka, Tamil Nadu and Andhra Pradesh, the central state of Madhya Pradesh and eastern states together contribute about 30 per cent to the country's rice output. Rice fields in these states are rain-fed.

"Even if the rains are good by the end of June in these states, we should not have a problem," the analyst said. "But right now it is too early to predict the outcome." Cultivation in the northern states of Punjab and Haryana, who contribute about 70 per cent to the country's rice output, is mainly on irrigated land.

The Indian Meteorological Department (IMD) in its forecast released in May has predicted a 10th successive normal monsoon in 1997. But the department had also said El Nino warm water currents, one of the 16 parameters on which IMD's monsoon forecast is based, was showing an "unfavourable trend" this year. El Nino raises the temperature of water off the coast of South America and can disrupt normal weather patterns world-wide. (Reuter)