Indian Grains Set To Hit Global Markets.

SINGAPORE/NEW DELHI: Indian rice exports are hitting global markets with a bang, regaining not just market share lost in three years of absence but also challenging the world’s top rice exporter Thailand, whose plan to lift prices threatens to stoke food inflation.

India, which has also allowed wheat exports for the first time since 2007, will add to the global oversupply of wheat, pressuring the benchmark US market, although high domestic prices will cap exports.

Last week, India allowed unrestricted exports of two million tonnes each of wheat and common rice, as the country’s stocks reach unmanageable levels, forcing the authorities to allow overseas sales.

New Delhi’s move to export non-basmati or cheaper grades of rice couldn’t have come at a better time for buyers, with benchmark rice climbing to a three-year top last week on expectations of intervention by the new Thai government.

India — which typically sold between two and three million tonnes of non-basmati rice in a year to Asia, the Middle East and Africa before imposing a ban in 2008 — could ship up to four million tonnes as Thailand displaces itself from the market.

Buyers have already started snapping up Indian rice, with at least 100,000 tonnes sold within days of the government move.

“Indian rice is very, very competitive,” said Vijay Setia, president of industry body the All India Rice Exporters’ Association, which groups 82 exporters and producers. “An encouraging response from buyers may see some more exports from India.”

The 100,000 tonnes was sold to Nigerian buyers at $470 per tonne, undercutting Thai and Vietnamese competitors in the first deals since the food minister gave a nod for exports last week.

The same company also sold 50,000 tonnes of wheat to Bangladesh. India’s wheat exports are likely to remain limited to neighbouring countries where it enjoys a freight advantage, given competition from rival Black Sea suppliers.

“With the news of India allowing two million tonnes of wheat exports, the global market will fall further, which is bad for Indian wheat exports,” said Amit Takkar, president of Emmsons International, a commodities trading company based in New Delhi.

“At best, only a few containers are going to countries such as Bangladesh.”

Indian rice, quoted well below the offers from Thailand and Vietnam, is likely to prompt buyers mainly in Africa and the Middle East to lock in supplies ahead of Southeast Asian harvest at the year end.

The 25 percent broken rice in India is quoted around $440 to $450 a tonne, free on board, while a similar variety is priced at around $515 a tonne in Vietnam.

Source : thepeninsulaqatar.com