Increasing freight rates are affecting the global rice trade
High freight rates are turning into a major challenge for exporters.
High sea freight rates, non-availability of containers, and a price decrease in rice rates by Vietnam and Pakistan are expected to impact rice traders from India in the period of 2021-22. One rice trade expert stated that even though rice exporters have signed advance contracts of 1-1.2 MM MTS monthly until November 2021, overall rice exports are likely to be lower at around 12 MTS. Increasing freight rates was turning into the main challenge for rice traders apart from increasing logistic bottlenecks at ports, said B V Krishna Rao, president of Rice Exporters Association. Rao also stated that the Indian non-basmati rice exports depend on Indian Railways for interstate logistics as Kakinada port is the main shipment port for non-basmati rice sourced from Chhattisgarh, Maharashtra, and Orissa regions to fulfill the shipments. Furthermore, Vietnam which became a major rice buyer in 2020 has stopped procuring rice from India starting May 2021. Vietnam rice importers are requesting discounts for the release of the shipment.
Thailand's 5 percent broken rice export prices increased to $387-$400 per MTS from the previous week’s $380-$395 per MTS. As per one rice exporter, the rice export demand continued to be flat, whilst a weak baht kept rice prices at low levels.
Vietnam's 5 percent broken white rice export prices decreased to $385 per MTS from the previous week’s $390 per MTS. As per one rice exporter, rice traders are cautious to sign new rice export agreements, as they are not sure if they can buy rice from farmers during the COVID-19 restrictions. The rice exporter also added that high freight rates also hampered export movements.
Bangladesh decreased the rice import duty to 15% from 25%, the second decrease since December 2020, to boost stockpiles and cool down high local rice prices as stated by one Bangladesh official. The Ministry of Food has so far authorized 71 private companies to import 400,000 MTS of rice after sorting the requests received until August 18, 2021(362K MTS of parboiled non-basmati rice and 56,000 MTS of Aatop rice).
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