MUMBAI (Reuters) - Indian rice traders are signing new export contracts again after a gap of nearly three weeks, four industry officials told Reuters on Thursday.
The resumption of shipments from the world’s biggest exporter could cap global prices which surged after India suspended exports amid a nationwide lockdown to curb the spread of the coronavirus, allowing rival countries such as Thailand to rise prices and shipments.
B.V. Krishna Rao, president of the Rice Exporters Association (REA) said export operations had also resumed, despite India extending the lockdown on its 1.3 billion people until at least May 3 as the number of coronavirus cases exceeded 12,000.
The demand for Indian rice is huge as it has been offered at steep discount to rice from other countries, said a Mumbai-based dealer with a global trading firm, but others said it would take time for exports to return to normal levels.
“New contracts are getting signed but at a very low pace due to bottlenecks in the supply chain,” Nitin Gupta, vice president of trader Olam India’s rice business, told Reuters.
India was offering the 5% broken parboiled variety at around $375-$380 per tonne on a free-on-board basis. Thailand was offering the same grade at around $535 per tonne.
“Thai prices are likely to come down once Indian port operations become normal,” the Mumbai-based dealer said. Labour shortages and logistics disruptions as a result of the lockdown have hampered deliveries.
Traders are mainly signing contracts for May and June shipments, expecting New Delhi to ease restrictions after May 3, said an exporter based at Kakinada in Andhra Pradesh.
“Some exporters are still not signing new contracts. They first want to execute stuck shipments,” the exporter said.
About 400,000 tonnes of non-basmati rice and 100,000 tonnes of basmati rice, meant for March-April delivery, are either stuck at ports or in the pipeline due to the lockdown, exporters said.
New Delhi mainly exports non-basmati rice to Bangladesh, Nepal, Benin and Senegal, and premium basmati rice to Iran, Saudi Arabia and Iraq.
India’s rice exports in 2019 fell 18.1% from a year earlier to 9.87 million tonnes, the lowest in eight years, as demand moderated from key Asian and African buyers.
Reporting by Rajendra Jadhav; editing by Kirsten Donovan
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