Rice export prospects appear bleak

By Our Special Correspondent

HYDERABAD, MAY 6. Though the Central Government has permitted Andhra Pradesh to export 20 lakh tonnes of rice at the Below Poverty Line (BPL) price to ease the glut in the production this year, export prospects appear bleak.

Both officials and traders are sceptical of exporting such a huge quantity of rice what with the ``unfavourable conditions'' in the international market.

The price of rice ruling in the markets of Singapore, Malaysia, Abu Dhabi and Russia available to India, as of now, is around Rs. 6,400 per quintal. The Centre has permitted the State to export the rice at the BPL rate of Rs. 5,650 per quintal, thereby subsidising the export.

On the face of it, the price appears competitive. But it is exclusive of additional charges to be incurred by exporters like clearance, forwarding and shipping charges. The extra cost on these handling charges would work out to roughly around Rs. 950 per tonne. The price of AP rice in the global market would then be at least Rs. 200 to Rs. 300 per tonne more than the prevailing rate in the rice-importing countries.

Officials of the Commerce and Export Department feel the exercise should have been initiated at least a couple of months ago to understand nuances of the international rice market. The exporters are thus handicapped by late entry into the market. The registration with the A.P. Export Development Agency (APEDA) for rice exports till now is about 6,75,000 tonnes.

``If we had entered the market by January, we would have been in an advantageous position. The traditional rice export market for AP has shrunk,'' said Mr. S. Balasubramaniam, Managing Director of A. P. State Trading Corporation.

Official sources said it would not be possible to export more than one to two lakh tonnes of rice to Bangladesh. Gulf countries prefer only par-boiled rice while the excess production in the State is of ordinary rice. The price factor, again, is a constraint in entering the African markets.

In a desperate move to save farmers from distress sales following the excess production of rice, the Chief Minister, Mr. N. Chandrababu Naidu, prevailed upon the Centre to earmark the lion's share of 20 lakh tonnes for Andhra Pradesh out of the total 30 lakh tonnes sought to be exported from the country.

The export route was opted to ease the overflowing godowns of the FCI as well as the accumulated stocks from the traders.

The crisis has come about with the paddy production (kharif and rabi put together) reaching a record 180 lakh tonnes. The carryover stocks were of the order of 10 lakh tonnes. The State has the capacity to absorb around 100 lakh tonnes which includes 70 lakh tonnes for internal consumption (including PDS requirement) and 30 lakh tonnes for movement outside the State by FCI. The State Government is thus faced with the problem of finding market for 30 lakh tonnes outside the State or the country.

The problem was aggravated with the FCI, which lifted 47 lakh tonnes of kharif production, slowing down procurement in rabi though it committed to lift another 23 lakh tonnes. Rice millers refused to buy paddy in substantial quantities from the farmers at MSP.

The international scenario for AP is not encouraging because the global rice crop for the year 2000 was also abundant at 397 million tonnes, according the information gathered by State officials from FAO. The international trade in rice is thin, estimated at 22.4 million tonnes. Thailand, Vietnam, China are the major players in the export market.

Official circles feel that a price of Rs. 5,100 per tonne may help push up the exports.

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