Rice exports from India, the world’s second-largest producer, may more than double this year on a record crop and as importers seek alternative to expensive supplies from Thailand, a shippers’ group said.
Shipments, including aromatic basmati rice, may total 6 million metric tons in the year ending March 31, compared with 2.2 million tons a year earlier, said Vijay Setia, president of the All India Rice Exporters’ Association. Traders have exported more than 1.8 million tons of non-basmati rice since India ended a three-year ban in September, he said.
Rising Indian exports may weigh on futures, which posted the first annual gain in three years in Chicago in 2011, and fill a shortfall in supplies from Thailand. Cheaper rice, staple for half the world’s population, may further cool global food costs, which dropped for a fifth month in November, according to the United Nations.
“Higher exports from India are pulling global prices lower,” Setia said. “India needs to ship value-added rice to get better prices.”
Global rice harvest is forecast to rise 3 percent to 480.4 million tons in 2011, the United Nations’ Food and Agriculture Organization said Dec. 8. Rice futures in Chicago gained 4 percent last year after Thailand, the largest exporter, started a state rice-buying policy at guaranteed prices in October even as the worst floods since 1942 wreak damage on farms.
Thailand’s rice exports may drop to 9 million tons in 2012 from an estimated 10 million tons a year earlier as the government’s purchase boosts prices, Deputy Commerce Minister Poom Sarapon said Dec. 23.
India won’t curb shipments as domestic stockpiles are comfortable, Food Minister K.V. Thomas said last week. State inventories climbed 16 percent to 29.7 million tons as of Jan. 1 from a year earlier, the Food Corp. of India said on Jan. 6.
“India will not think of a ban until it fears that local prices are going to increase,” Ajay Jain, assistant vice president at Almondz Commodities Ltd., said in by phone in New Delhi. “The rice crop is good in India and other countries and the global prices may remain stable.”
Rough-rice futures for March delivery advanced as much as 0.7 percent to $14.785 per 100 pounds on the Chicago Board of Trade today and was at $14.705 at 9:26 a.m. in Mumbai.
KRBL Ltd., India’s largest exporter, led shares of shippers higher in Mumbai trading. KRBL gained as much as 8.8 percent to 16.15 rupees, Kohinoor Foods Ltd. surged as much as 5.6 percent to 34.05 rupees, while LT Foods Ltd. climbed as much as 5.9 percent to 42 rupees.
Indian traders have contracted to ship 2.24 million tons of basmati rice in the nine months through Dec. 31. more than the 2.16 million tons a year ago, Setia said. The contracts may rise to 3.5 million tons for the full-year, while actual shipments may be 2.5 million tons, he said.
Shipments fetched an average $968 a ton in 2011 as against $1,110 a ton a year earlier, he said.
India may harvest a record 102 million tons in 2011-2012 season ending June after farmers boosted rice planting and the crop escaped damage from floods or pest attacks, he said.