India approved the exports of 1.8 million tons of non-basmati rice after ceasing from 2009. Their non-basmati rice will be exported globally via three channels, i.e., 1 million tons exported by their private sector, 300,000 tons sent to Bangladesh by their government and another 500,000 tons subject to G2G exports. The minimum export price for white rice is set at USD400 per ton, while the minimum price for parboiled rice is USD450 per ton.
The return to non-basmati rice exports by India will affect Thai white and parboiled rice exports, particularly during 2H11. For the white rice market, intensified competition for market shares will likely escalate. Previously, Thai white rice exporters experienced severe competition with Vietnam due to our weakness on relatively higher prices.
Meanwhile, the return of parboiled rice exports by India should have considerable impact on market overall, especially for parboiled rice millers in Thailand that continued to expand their business during recent years (as Thailand has been the largest parboiled rice exporter.) As a result, the price of paddy rice domestically (as the raw material for parboiled rice processing) will fluctuate more.
An issue that should be monitored during 2011-2012 will be climatic conditions. If the climate in India is good enough to boost rice production to levels adequate for export, India may become a significant rival to Thai white and parboiled rice exports in the future.
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