India: Rice exports fall as dollar crashes

The downward trend of dollar-rupee exchange rate from Rs. 44 to Rs.40.5 has adversely affected the rice exports, which is evident with less number of ships calling on the anchorage port for the past few weeks here.

As against 10 ships on an average, at any given time anchored, at the port for the past three years, now it has come down to six. The appreciation of rupee value against dollar is stated to be the major factor that made the exporters to adopt `wait and see' policy. One of the Delhi-based rice exporter has even terminated his contract fearing heavy loss. After completion of all export formalities that took nearly two months, in the last minute he preferred to back out, as he has to suffer a net loss of Rs.1 crore on one shipment of 10,000 Mts of rice. `

When compared to the exporters loss, our's is negligible. Of the total 40 rice exporters only a few are now venturing to export, that too under the `dollar cover with bankers', securing the safeguard from the dollar rate fluctuation' said a leading clearing and forwarding company agent while talking to The Hindu here on Wednesday. He says that any exporter without the dollar cover agreement invariably had to incur loss at the rate of Rs.1 crore for every shipment.

The domestic market for rice is very much encouraging and there is not much difference in its international price as such the exporters are reluctant to fulfill their export contractual obligations. More over the steep rice in godowns rentals and the imposing of service charge at 12.36 per cent has had its adverse affect.

`If there is further decline in dollar value and the rice price in domestic market continues to be stable, we apprehend further fall in exports and virtually it may touch rock bottom by July `remarked another shipping agent.

Appreciation value

However the appreciation of rupee value against the dollar on one side and the reduction in import duty on vegetable oil imports on the other has made it lucrative for the importers to carry out the business

.The vegetable oil imports have now registered an upward trend in recent weeks. Of the nine ships scheduled to touch the anchorage port within next two days five are importing fertilisers and remaining four are for export of Sand and cement, granite blocks, bentonite and rice bran extraction and not even a single shipment of rice which speaks volumes about the gravity of the situation.