Daily Management Review

Global traders are buying up Indian rice


Fearing that local authorities may impose a restriction on the sale of the wheat outside the nation, global traders are increasing their purchases of Indian rice, according to Reuters, which cited sources. The Indian government had previously imposed a similar ban on the export of wheat.

International Rice Research Institute (IRRI)
International Rice Research Institute (IRRI)
In mid-May, India's Ministry of Commerce and Industry announced restriction on wheat exports from the country, citing "a rapid spike in world wheat prices." According to the ministry, such exports would henceforth be permitted only on the basis of documents signed before the ban's effective date, or on the basis of a special request from a government of any country that will be approved by Indian authorities.

"Rice dealers have increased their purchases (of rice) and placed orders for longer deliveries as a result of India's surprise ban on wheat exports, expecting that the world's top rice exporter may limit these supplies as well. Traders have secured contracts to export one million tons of rice for delivery from June to September in the last two weeks," according to the news,

Traders are also opening letters of credit quickly after signing contracts, according to the sources, to ensure a documented export volume even if India decides to limit it.

India has already exported 9.6 million tons of rice this year, according to the agency. Furthermore, the country is responsible for more than 40% of worldwide rice commerce.

source: reuters.com