India set to lose out on global rice trade

India's share in the global rice trade is expected to plummet to around half of last year's estimate, as per the United States Department of Agriculture.

Total rice exports of India stood at 2,000 thousand metric tonnes (TMT) as of February 10, 2004 against 4,421 TMT during the corresponding period last year.

This is in the backdrop of declining estimates for total global exports that is expected to fall to 24.7 MMT in 2004 compared with 27.3 MMT in 2003.

Global demand for rice in 2003-04 is expected to decline as well. It is estimated to fall by 10 per cent from last year. This can largely be attributed to the reduced demand in Latin America, Africa, and Asia following greater regional production.

As a fall out in Latin America, Brazilian imports are expected to drop 50 per cent. On exports, neither the US nor India is expected to export high volumes. India's supplies have returned to buffer levels after the government revised its export policy.

The trend was seen in the US as well, where stocks have returned to more normal levels following the extremely low prices and strong exports to neighbouring markets in 2003.

According to the USDA, Thailand is expected to increase its market share and projected to export a record 8.25 million tonne of rice.

During January there was a significant upward movement in Thai export price quotes. Early January, Thai 100B was up $8 to $218 per ton, free on board.

However, in mid-January it hit a high of $225 per ton. The increase in prices was largely attributed to tight regional supplies.

In Vietnam, export price quotes continued to increase owing to limited availability of rice. Viet 5 was up $3 to $201 a ton, FOB.

Similarly, tight exportable supplies had bumped India 5 per cent up about $11 to $208 per ton, FOB. Asian prices, however, could ease after Vietnam's peak harvest in March.