Indian rice exporters to gain market share: Ind-Ra

Mumbai, Jan 4 (PTI) The credit profile of riceexporters is likely to improve over the near-to-medium termdue to increase in market share following production shortfallin parts of South Asia, India Ratings and Research (Ind-Ra)said in a report."Credit profile of rice exporters to improve over thenear-to-medium term on the back of increased market share,higher realisations and improved liquidity. Significantproduction shortfall in parts of South Asia is likely toresult in a substantial gain in market share by various Indianexporters," Ind-Ra said.Ind-Ra expects Indian rice exports to account over 29per cent of the global rice trade in marketing year (MY)2017-18 compared to 26.70 per cent in the MY 2016-17.The rating agency said subdued yields across majorSouth and East Asian rice producers should result in higherrealisations and marginal improvement in export volumes.Weak output levels in Vietnam and other parts of SouthAsia have resulted in a sharp spike in international prices,primarily on the back of increased demand from exporters todeliver forward export orders, it added.The agency expects demand to remain strong on the backof higher paddy procurement target and minimum support price.In June 2017, the government had decided to increasethe minimum selling price of common grade paddy by 5.4 percent to Rs 1,550 per quintal, it said.The procurement target was also increased to 37.50million tonnes in MY 2016-17 from 34.34 million tonnes in theprevious year, it added.Indian Basmati exports grew 35 per cent annually to Rs136 billion in the first half of FY18 on the back of asignificant growth in offtake by Iran.While the timely lifting of the temporary import banby the Iranian government on November 22, 2017 is expected toaugur well for Indian rice exporters, yet, significant volumegain is unlikely due weak demand from countries like SaudiArabia and Kuwait, it said.Iran is likely to replace Saudi Arabia as the largestexporter of Indian Basmati rice.Saudi Arabia reported a 13 per cent decline in riceimports in the first quarter of FY18.Despite the recovery in demand from Iran and the US, Ind-Ra expects total growth in Basmati export volumes to remain range bound between 3 per cent and 5 per cent.

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