Andhra Pradesh to use deepwater port to export rice for the first time

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Andhra Pradesh is planning to use a deepwater port to export rice for the first time in decades amid a global shortage of the grain. This could raise rice shipments from India this year by almost 20 per cent.

The government order, as reported by Reuters, allows Kakinada Deep Water Port to handle rice until more capacity is created at the adjoining Anchorage Port. More shipments from the world’s biggest rice exporter could cool global prices.

Congestion at the Kakinada Anchorage Port, India’s biggest rice-handling facility, had led to a waiting period of up to four weeks compared with the normal wait of about a week, raising costs for shippers and limiting exports, said B.V. Krishna Rao, president of the Rice Exporters Association of India.

The congestion is on account of a surge in demand, driven by production shortfalls in other rice-producing countries. Thailand and Vietnam are the other big suppliers, but their production has fallen in recent months because of excessive rains or drought, sending their prices to multi-year highs.

The move means monthly exports from Andhra Pradesh alone will double to 650,000 tonnes, Rao said, adding that rice shipping would begin in the deepwater port within days. India’s rice exports this year could rise to a record 16 million to 17 million tonnes from last year’s 14.2 million, Rao said.

The government also feels rice exports, excluding the premium basmati variety, could rise by 2 million to 3 million tonnes this year.  India has a massive surplus for export and prices are competitive, but some international buyers switched to Thailand and Vietnam because of the shipping delays.

India’s 5% broken parboiled variety is being offered at $402-$408 per tonne this week, significantly lower than Vietnam’s $510-$515 and Thailand’s rate of more than $540. India mainly exports non-basmati rice to Bangladesh, Nepal, Benin and Senegal, and basmati rice to Iran, Saudi Arabia and Iraq.

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