Strong Demand for Indian rice export
Andhra Pradesh [India] to use deepwater seaport for rice exports.
One of India's Southern states, Andhra Pradesh plans to operate their Deepwater seaport to export rice for the first time in decades. Amidst a global rice shortage, the government order seen by Reuters might boost rice export this year 2021. As per B.V. Krishna Rao, president of the Rice Exporters Association of India the order allows Kakinada Deepwater seaport to handle rice until more capacity is formed at the neighboring anchorage seaport. As compared with the normal waiting time of about a week, the bottleneck at the Kakinada Anchorage seaport (India’s biggest rice export port) had led to a delaying period of up to four weeks. This has resulted in increasing costs for rice traders and limiting rice exports. The government acknowledged that the bottleneck in the seaports has arisen due to the surge in rice demand from rice exporting countries like Thailand and Vietnam. Whereas Thailand and Vietnam continue to face production shortages leading the rice importing countries to continue their procurement from India.
Indian Parboiled Rice exports went soft as limited covering in short positions were seen mainly due to the non-availability of containers. Rice traders have remained to emphasize the overpriced freights enforced by shipping lines which have led to a bearish outlook and high margin leakages due to longer transit of rice shipments. The majority of the rice traders have indicated that this crisis will continue until the middle of the year 2021 or may even out in phases. While 100 percent broken white rice exports remain soft to bearish as more arrivals continue for rice exports to rice importing countries, Africa and Southeast Asia.
Vietnam's rice export prices for 5 percent broken white rice increase to $510-$515 per MTS from $505-510 per MTS from the previous week due to limited rice supply. As per one rice trader, the market is slow as most of the rice exporters are already on a holiday for the Lunar New Year. Rice buyers have also postponed signing new contracts as they are looking forward to the new rice harvest. The rice trader also added that the winter-spring rice crop harvest will peak in late Feb’21 or early Mar’21. Rice exports were also being slowed down by high freight rice charges due to a container shortage. One rice exporter said that rice shipments to local ports have been encountering delays, and they cannot even book rice shipments for rice importing countries in Europe and Africa.
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