Rupee’s weakness forces exporters to lower price for rice

A weakened currency has forced exporters to lower prices for non-basmati rice even as the demand for 100 per cent brokens remains intact on strong demand, amidst challenges on the logistics front.

 

'There is some softening of prices, mainly due to the currency, which has weakened by about three per cent,' said BV Krishna Rao, President, The Rice Exporters’ Association. However, the 100 per cent broken rice is holding firm on tight supplies and demand from countries such as China, Indonesia and Senegal, besides domestic demand for production of ethanol, Rao said.

 

Strong offtake

Broken rice from India has seen strong offtake from countries such as China, Vietnam, and Indonesia among others, where it is used as feed and noodles, while in the African countries such as Senegal it is used as a food.

 

'The supply of broken rice in the export market is tight. Broken prices have come closer to white rice prices in the domestic market and have topped prices in places like Raipur, Kolkata and Kakinada some times,' Rao said.

 

Presently, the free-on-board prices broken rice prices are around $330 per tonne, while it varied between $270 and $300 last year. White rice 5 per cent broken has eased marginally to around $350 per tonne and parboiled around $360, Rao said.

 

Broken rice is a by-product of paddy processing. For every quintal of paddy processed, one gets 60 per cent of head rice and 10 per cent brokens, Rao said, adding that there was no mechanism to make rice into brokens.

 

Commenting on the outlook for exports, Rao said, 'I think we will repeat last year’s performance. We are not seeing any dip in enquiries, while the concerns of higher freight costs still exist'. India’s non-basmati rice shipments stood at over 17 million tonnes during 2021-22, an increase of around 30 per cent over the previous year’s 13 million tonnes. In value terms, the non-basmati rice exports stood at over $6.11 billion from $4.8 billion in the previous year.

India does not plan to curb rice exports as the world's biggest exporter of the staple has sufficient stocks and local rates are lower than state-set support prices, trade and government sources said.

 

India banned wheat exports on May 14, just days after New Delhi forecast record shipments of 10 million tonnes this year, as a heat wave hit output and sent domestic prices to record highs.

 

'We have more than sufficient stocks of rice and there is no concern at all in terms of either prices or availability for exports and domestic requirements,' said a senior government official involved in the decision making.

 

'At this stage, there is no consideration at all to prohibit rice exports,' said the source, who didn't wish to be named in line with official rules.

 

Rice exports from India, also the world's second biggest consumer of the grain, jumped to a record 21.2 million tonnes in the fiscal year to March 2022 from 17.8 million tonnes the previous year.

 

Rice prices are falling, even as exports rise, as India has massive stocks and local purchases by the Food Corporation of India (FCI) - the state stockpiler - are increasing, said B.V. Krishna Rao, president of the All India Rice Exporters Association.

 

Milled and rice paddy stocks at FCI totalled 66.22 million tonnes against a target of 13.58 million tonnes.

 

'There is no need to put any restriction on rice exports,' Rao said. 'Wheat output and prices were affected due to the war in Ukraine, but ... the Black Sea region is neither a major producer nor consumer of rice.'

 

India's rice export prices extended losses this week to touch $350 to $354 a tonne, the lowest in more than five years.

 

In the crop year to June 2022, India's rice output jumped to a record 129.66 million tonnes from 121.1 million tonnes the previous year.

 

Higher output has forced FCI to buy more rice from domestic farmers, taking a record 80.4 million tonnes of rice paddy from growers so far this year against 77 million tonnes over the same period last year.

 

'FCI's procurement is going up, and that is an indication that there's no shortage, so there is no logic for any ban on rice exports,' Rao said.

 

Commerce and Industry Minister Piyush Goyal on Tuesday met World Trade Organisation Director-General Ngozi Okonjo-Iweala and reiterated India's support for strengthening the multilateral trading system.

 

During the meeting on the sidelines of the World Economic Forum Annual Meeting 2022 here, Goyal said India is committed to the WTO's efforts to strengthen the multilateral trading system to ensure free and fair trade among member countries.

 

He also met Swiss State Secretary Marie-Gabrielle Ineichen-Fleisch and exchanged views on enhancing India-Switzerland trade ties.

 

'India is an attractive market for Swiss cutting-edge technology and expertise to achieve scale and serve the world,' the minister tweeted later.

 

Among his various meetings, Goyal also met Queen Maxima of the Netherlands and held talks on ways to further strengthen and renew Indo-Dutch ties by expanding business and investment opportunities while also exploring prospects of joint cooperation between the two countries.

 

He also met UAE's Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi and Indian Energy Alliance Executive Director Fatih Birol; Denmark's Minister for Industry, Business and Financial Affairs Simon Kollerup; and Bangladesh's Private Industry and Investment Adviser to PM Salman F Rahman.

The Embassy of India in Baku, in association with the Agricultural and Processed Food Products Export Development Authority (APEDA), India has organized a Business Webinar followed by B2B interactions on cut flowers, foliage, planting material, orchids, seeds, vegan, meat, rice and tea products.

 

The Agricultural and Processed Food Products Export Development Authority (APEDA) was established by the Government of India and is mandated with the responsibility of export promotion and development of the agricultural products.

 

The event which was part of the celebrations of 75 years of India's Independence - Azadi Ka Amrit Mahotsav, was attended by the major companies of relevant products in India and Azerbaijan, representatives from the Food Safety Agency of Azerbaijan, the Agro Services Agency under the Ministry of Agriculture as well as journalists.

 

In his opening remarks, General Manager of APEDA V.K. Vidyarthi underlined that India has well established infrastructure for agro-food processing and the state of the art laboratories in India conduct tests in accordance to food safety standards.

 

Speaking at the webinar, Ambassador of India to Azerbaijan Bawitlung Vanlalvawna noted that there is a huge scope for diversifying India's economic engagement with Azerbaijan. He said that Indian food products are already known in the Azerbaijani market as varieties of products including rice, meat, spices and tea are sourced from India. He further stated that there is much scope for enhancing engagement and collaboration between the two countries in this sector.

 

Chairman of APEDA M. Angamuthu mentioned that India is a hub of agriculture and food products because of its diversity and India's floriculture sector has evolved as a commercial business venture with a high market value and tremendous opportunities. He noticed that increasing floriculture production in India offers great opportunity for bilateral cooperation with Azerbaijan in this sector.

 

Representative of the Food Safety Agency of Azerbaijan Vafa Safarli made a presentation of the Agency's activities, its services and documents issued by the Agency as well as rules and procedures for import of floriculture, seed and food products in Azerbaijan.

 

Assistant Director of National Seed Association of India Deepankar Pandey made a presentation on export of seeds, its scope, prospects and opportunities in which he stressed that India's seed sector is valued 3 billion USD and is 5th largest globally.

 

The event also featured a presentation on export of vegan products by Executive Director of Plant based Foods Industry Association Sanjay Sethi.

 

According to the Azerbaijani statistics, bilateral trade between India and Azerbaijan during January-December 2021 was US$ 739.10 million increasing 26.8%. India was 10th major trade partner of Azerbaijan during this period. Azerbaijan’s export to India was US$ 594.43 million increasing 30.1%. India's share in Azerbaijan's total export during the period was 2.7%, being 8th export destination for Azerbaijan. Azerbaijan’s import from India was US$ 144.67 million during January-December 2021 with an increase of 14.8% as compared to the same period of last year.

India's exports rose to a record high of $421.8 billion during the financial year ended March 2022 despite the COVID-19 pandemic and global supply chain disruption and the shipment may surge to $1 trillion by 2030, Union Minister for Commerce and Industry Piyush Goyal said on Tuesday.

 

Addressing the 'Breakfast session Discussion on Trade 4.0' at the World Economic Forum in Davos Goyal said, India could achieve a target of $1 trillion worth of merchandise and services export each by 2030.

 

Noting that in the last 8 years, the government had focussed extensively on structural reforms the minister said that each one of those movements has been holding India in good stead during times of crisis.

 

Observing that the India story had been receiving a lot of enthusiasm across the world, the minister said that in spite of constraints like COVID-19, chip shortages, conflict, rising commodity prices, container shortages and significant shipping and logistics issues it has been facing in the last two years, which caused massive supply chain disruptions that threw the global economy off-balance, Indian businesses had displayed great resilience, overshooting export targets and achieving $421.8 billion worth of exports.

 

He urged Indian industry to look at boosting value-added exports and ensure that new jobs came into India instead of raw materials going out of India.

 

Highlighting the serious efforts being made in that direction, the Minister said that the government was striving to ensure orderly behaviour of prices and ensure that businesses add value and jobs, according to a statement released by the Ministry of Commerce & Industry.

 

Stressing upon the government's bid to bring down logistics costs through measures such as PM GatiShakti, the Minister said that the National Master Plan would help improve infrastructure planning and ensure the implementation of projects within time and budget.

 

Assuring that the government would wholeheartedly support businesses, the Minister urged the industry to bring scale into all economic activities.

 

Expressing concern over the excessive dependence on international supply chains, Goyal urged businesses to procure locally wherever there is an opportunity. He asked businesses to support each other and help fortify domestic supply chains.

 

Referring to Trade Agreements recently inked with UAE and Australia, the Minister said that these agreements were opening new frontiers in international trade. He added that agreements with Canada, EU, UK, Israel and GCC were in the pipeline. The Minister said that the world had great confidence in India and wanted to engage with it enthusiastically.

India will continue to allow wheat export for countries which are in serious need, are friendly and have the letter of credit, said Shri Piyush Goyal, Union Minister for Consumer Affairs & Food and Public Distribution, Commerce & Industry, and Textiles while speaking at the World Economic Forum at Davos, Switzerland.

 

Shri Goyal highlighted that while 7%-8% rise in wheat production was expected this year, severe heat waves led to early harvest and loss of production.'Given this situation, what we are producing is about enough for domestic consumption,' Shri Goyal added.

 

India was never a traditional player in the international wheat market and export of wheat only began about 2 years ago. Speaking at the World Economic Forum at Davos, Switzerland, Shri Piyush Goyal, Union Minister for Consumer Affairs & Food and Public Distribution, Commerce & Industry, and Textiles said that last year 7 LMT wheat was exported and majority was done within the last two months when the war between Russia-Ukraine developed.

 

'India wheat exports are less than 1% of world trade and our export regulation should not affect global markets. We continue to allow exports to vulnerable countries and neighbors,' the Minister said.

Manipur Organic Mission Agency (MOMA) mission director and horticulture & soil conservation additional director K Debadutta Sharma has revealed that plans are afoot for opening an outlet in Dubai this year for sale of Manipur's organic produce as well as exporting state's pineapple.

 

Speaking to TPC on Tuesday, K Debadutta Sharma informed that the government in last few years has been taking up initiatives to increase production of organic produce and to raise the income of organic farmers under Mission Organic Value Chain Development for North Eastern Region (MOVCDNER).

 

Under the scheme, there has been increase in production of organic pineapple, lemon, orange, ghost pepper (U-morok), ginger, turmeric and Chakhao in the state, he added.

 

Debadutta continued that the organic produces are being exported due to high demand for them outside the state.

 

Under the scheme, state representatives have been attending numerous national and international expos and buyer-seller meets which have led to more and more countries ordering state's organic produce with the only issue being the state not being able to meet the demands, the additional director disclosed.

 

He also mentioned that from this year onwards under the aegis of horticulture & soil conservation minister Letpao Haokip, state's farmer producer companies (FPCs) will be able to export organic pineapple directly to Dubai instead of earlier process of exporting it through agencies of other states.

 

Debadutta also informed that two FPCs of the state have received import-export licence for exporting state's organic produces namely, Thayong Organic Producers Private Company Limited and Chak-hao Poireiton Farmer Producer Company, Imphal West.

 

These two companies have been registered under Agricultural and Processed Food Products Export Development Authority (APEDA) and received permits to export products to other countries.

 

Organic outlets have been opened in Pune and Bengaluru to market state's produce and a place has been identified to open such an outlet in Delhi also.

 

Plans are also afoot for opening state's organic outlet in a supermarket in Dubai, he reiterated.

 

Debadutta further said that Dubai authorities have completed tests of state's organic Chak-hao and as it has successfully cleared the tests, the authorities have given approval for its import.

 

Centre’s first priority is to ensure sufficient availability of sugar for consumption at reasonable rate, thereafter maximum sugar to be diverted to ethanol said Shri Sudhanshu Pandey, Secretary Department of Food and Public Distribution while interacting with media persons here today.

 

Talking about prioritizing domestic consumption, he said that during the festival period of October & November, the demand of sugar increases and therefore, the Centre is committed to ensure availability of sugar for the lean period.

 

Government of India is committed to stablise prices of sugar in the domestic market and in last 12 months, prices of sugar are under control. Wholesale prices of sugar in India are range bound between Rs. 3150 - Rs. 3500 per quintal while retail prices are also within control in the range of Rs. 36-44 in different parts of the country.

 

Global situation reflects a shortage of sugar, especially due to lower production in Brazil. This may trigger the demand globally and so as to safeguard domestic availability and interests, DGFT issued an order to maintain domestic availability & price stability of sugar in the country during sugar season 2021-22 (October-September), Central govt to regulate sugar exports w.e.f June 1, 2022, till further orders. Govt will allow sugar exports up to 100 LMT.

 

This Year India has produced 355 LMT of Sugar after discounting diversion of about 35 LMT of sugar to production of ethanol, highest in the world. India is the second largest exporter of Sugar. Total export should be about 100 LMT in current sugar season 2021-22. Current exports of 90 LMT has been contracted of which 82 has already been lifted, remaining 10 LMT can be exported. Average monthly consumption in India is around 23 LMT, sufficient domestic stock available, around 62 LMT. Average retail price of sugar in India is around Rs. 37-44/kg.

 

Sugar exports to be all time high, despite a cap on exports. Export has gone from 0.47 LMT to 100 LMT in last five years which is more than 200 times. From 1st of June all mills will apply to DFPD for exports. For monitoring of exports, sugar mills will submit online information about dispatches for export. The data will provide basis for determining quantity for issuance of Export Release Orders. No approvals required for exports upto 31 May 2022. DoFPD will release Export Release Orders (EROs) on receiving applications from sugar mills and exporters. Procedure for application of ERO by Sugar Mills and Exporters have been issued on 24.05.2022 by Directorate of Sugar, DoFPD. Sugar mills will apply for ERO for dispatch of sugar from mills for export. Exporters will apply for export of sugar out of country. Both need to apply online through National Single Window System (NSWS).

 

Production of sugar in the country is expected to be 17% higher than previous sugar season. Further, the country has been the top consumer of sugar in the World with about 278 LMT of sugar consumption in the current Sugar Season. Consumption of sugar in India is consistently increasing at nominal growth of 2-4% per annum. Per capita sugar consumption in India is about 20 Kg which is less than global average.

 

In order to judiciously utilize the surplus sugar available in the country since 2017-18, Government of India has taken multiple and timely measures which have resulted in reasonable stock of sugar in the country and not exorbitant stocks of sugar which could have resulted in blockage of funds of sugar mills and non-payment of cane arrears to farmers. Various schemes of Government to provide financial assistance in form of subsidy to maintain buffer stocks as well as for transportation of sugar for export purposes in last 4 years have ensured timely payment to farmers and financial strength to sugar mills. As an outcome of these measures, more than 99.6% of cane arrears of last sugar season have already been paid and more than 84% of cane dues of current sugar season have also been cleared. Number of operational sugar mills has also increased to 522 sugar mills in current season.

Singapore’s Agrocorp Intl offers the grain for $548.38/tonne

Bangladesh has rejected a sole bid by Agrocorp International Pte Ltd for its tender to purchase 50,000 tonnes of wheat. 

 

According to Delhi-based exporter Rajesh Paharia Jain, Agrocorp offered wheat of any origin at $548.38 a tonne. The bids were opened for scrutiny on Tuesday.

 

This is far higher than the lowest bid accepted for the April 11 tender by Bangladesh. India’s Bagadia Brothers won the tender, offering wheat at $399.69 a tonne. 

 

'Bangladesh was not expected to buy in this tender. Even the next, it may not buy. It wants to use the tenders as a yardstick to check prices and then use it as a reference to approach India for a government-to-government supply, 'Jain said.

 

Bids for the next tender for the import of another 50,000 tonnes of wheat will be opened by Bangladesh on May 29. 

 

India banned wheat exports on May 13 to address issues such as low-than-expected production, rising inflation, and low procurement by the Food Corporation of India in view of open market prices ruling higher than the minimum support price (MSP) of ?2,015 a quintal following demand for exports. 

 

This has led to a surge in global wheat prices, though they have dropped eight per cent in the past week as supply concerns have eased. On Tuesday, benchmark wheat futures on the Chicago Board of Trade closed lower at $11.32 a bushel ($415.93 a tonne).

 

Jordon too rejects bid

Similarly, Jordan also cancelled its tender to buy wheat as its Ministry of Industry, Trade and Supply received only a solitary bid from the US-based CHS cooperative owned by farmers and local cooperatives.

 

The single bid for the Bangladesh tender was higher, mainly on account of India’s ban on wheat exports. In the April 11 tender, the offer price was lower than the previous tender bid of $406.83 earlier that month. 

 

In another bid finalised in the third week of March, Swiss Singapore Overseas made the lowest bid at $409.97 a tonne, covering cost, insurance, and freight plus unloading costs.

 

Wheat for all these tenders was expected to be supplied from India. The bids include cost, insurance, freight, and unloading charges. Earlier this year, Bangladesh decided to import one million tonnes of wheat through tenders after supplies from Russia were affected.

 

Supplies from Russia and Ukraine, which make up nearly 30 per cent of the global market supply, have been affected following the conflict between both the erstwhile Soviet members. 

Report containing labels that have been examined and found in violation to be submitted by June 1

The Food Safety and Standards Authority of India (FSSAI) has directed State food safety commissioners to scrutinise the labels of multi-source vegetable edible oil products sold on retail shelves to check for compliance with labelling regulations. It has also asked them to take immediate action against errant manufacturers that are not in compliance with regulations and submit a report by June 1.

 

As per FSSAI’s regulations, edible oil products containing an admixture of multiple vegetable edible oils cannot be sold under the 'common or generic' name of a single oil used in the blend. It needs to be labelled as 'multi-source edible vegetable oil' as per FSS (Prohibition and Restriction on Sales) Regulations 2011.

 

In addition, the labels need to display information regarding the name and nature of each edible vegetable oil used in the preparation of the product, as well as their percentage by weight. This declaration needs to be made on the front of the pack and immediately below the brand name or trade name of the multi-source edible vegetable oil products as per the FSS (Labelling and Display) Regulations 2020, it stated.

 

‘Deceptive labels’

In a letter sent to all State food safety commissioners, FSSAI has directed them to 'check and verify all such oil products/ manufacturers' that come under their jurisdiction. It has directed that improvement notices must be sent to Food Business Operators who are found to be in violation of these labelling regulations. It also pointed out that notices should also be issued to manufacturers that have put 'deceptive labels' on multi-source vegetable edible oil products, 'creating erroneous impression regarding the nature of products.'

 

The action-taking report to be submitted by June 1 must outline various details such as the number of labels that have been examined and found in violation, besides the number of improvement notices issued.

 

As per FSSAI standards, multi-source vegetable edible oils is an admixture of any two edible vegetable oils where the proportion by weight of any vegetable edible oil used in the admixture is not less than 20 per cent.