Rice exporters seek government help to deal with high freight rate, container shortage

Rice exporters are seeking government intervention to protect their margins and remain competitive as high freight rates and a scarcity of containers have impacted the trade.
Exporters have sought government assistance in transportation and marketing along with benefits of export-promotion schemes, VK Kaul, executive director of All India Rice Exporters Association, said.

“The remaining part of the financial year is the peak export season for basmati rice and we need assistance,” he said.

Exporters are unable to increase prices of rice news24nationificantly for fear of losing business to other countries.

Freights on some routes had trebled compared with the pre-Covid time, Kaul said. Freight rates to West Asia, which accounts to 75% of trade, rose about 243% after the lockdown to $1,200-1,500 per container, while freight for shipment to Caribbean countries increased 344% to $4,200-4,500 per container during the same period.

“The containers are in small supply because with drop in imports from China, the inward movement has got restricted,” Kaul said.

Freight forwarding agents said there was 45-50% shortage in containers with monthly requirements at 30,000 to 35,000 for both basmati and non-basmati rice exports.
The rice exporters association said shipping companies had not fully deployed their fleets, which reduced the availability of ships in India.

Congestion in trans-shipment ports of Sri Lanka, Singapore and Malaysia delayed Indian cargoes, said BV Krishna Rao, president of the association.

“The mismatch between India import and export has impacted the container availability,” Rao said. “Freight rates to Africa, which is our key export market, has doubled to $2,400 per container of 25 tonne. However, we have only been able to increase the white rice and parboiled rice price by only 8-10% as we are worried that business might shift to other exporting countries.”

If the freights are rationalised and containers are available, exports can rise to a new level, said Ashwani Kumar Arora, managing director of LT Foods that sells basmati rice under Daawat brand. He said there was delay of over four weeks in Singapore port and one week in Colombo port, making it difficult for exporters.