Diversification keeping in mind the minute pulse of each market segment is the key, according to him.

Interviewed through e-mail by www.oryza.com, Dr Raju said it is important to understand closely the market preferences to sustain market shares and expand to new areas.

He laid stress on need-based development of rice varieties to cater to different market preferences. Major rice-growing countries will have to aim differently for domestic and export markets in future.

Dr Raju believes it is vital to break into new markets for which he advocates the route of ready-to-eat packs.

Rice products in combination with fish could be tried, according to him. Another key to success in discerning markets will be the ability to form joint ventures with native marketing companies to repack imported rice in accordance with their specific tastes.

He rates subsidies doled out by some countries like Japan, US, and a few countries of South-East Asia as a major challenge to the growth of global rice industry.

Dr Raju feels the multiplicity of regulators in some countries like India impedes proper growth of the industry. The solution, according to him, would be to form a single body that would coordinate the functions of different agencies and present a fast response to situations as and when they arise.

Excerpts from interview with Dr B. Yerram Raju

1. What are the mechanisms that would help ensure quality in rice for exports globally? Is it desirable to have a mechanism for stabilizing rice prices globally?

Rice quality is related to the taste and the way people eat in different markets. In countries like China, Indonesia, Thailand, Vietnam, South Korea, people would like to have greasy rice as they eat with the chopsticks. In India, Pakistan, Bangladesh, Middle East, people eat it with hand and therefore look for non-greasy variety. Indian non-basmati rice less than six months old after harvest if consumed will be greasy and sweet. It is therefore necessary for the producers to mill the rice immediately after harvest and send out to the markets abroad if they are located in Southeast Asia.

The second step would be to locate those strains that would retain the moisture even after nine months or a year after harvest to produce the greasy content when cooked.

The other measure is to use the media to cultivate the consumers’ taste to the most exotic and tasteful rice with rich vitamin content and the cost of such media advertising being high has to be borne by the government.

Creating new brands and patenting them would be the most important step and the rice millers’ and exporters’ associations can take this up in conjunction with the government.

In each of the intensive rice growing districts, certain areas should be demarked for producing rice required for exports. In these demarked areas, the producers should be educated about the varieties sought for by the markets; the cultural practices to be adopted, the grain length looked for, the moisture content, the milling standards, the packaging standards etc. The insurance mechanisms for any crop failure should also be in position. The rice mills in the selected area should be modernized with state-of-art technology in position.

2. How important is finding new markets for you as an industry player? Which are the prospective markets and what do you think is the best strategy to break into them?

It is important to find new markets; the best strategy to break into them is to go with ready-to-eats and display on the pack the variety and characteristics of rice that brought the taste to the content. Second, establish joint ventures with the natives in the export markets to repack the exported rice to the requirements of the native consumer.

3. What are the challenges to increasing global rice consumption? What are your suggestions to prevent the erosion in area under rice globally?

Cultivating people to new tastes
Combining rice with fish products as the current century would usher in the blue revolution.
Keeping rice price within the reach of the average consumer as rice markets predominate in the developing and poorer countries than the developed countries.
Ensuring continuity in supply despite the influence the monsoon would have in the producing nations.
The subsidies doled out by US, Japan and a few South-East Asian nations for agriculture from production to export.
Low quality rice is likely to pick up in demand as the demand for feed increases due to its substitutability for corn.

4. How are the crops in your country and globally shaping up for the new trade year? What is your reading of the best buy/sell prices in the coming months?

In our country (India), the rice exports are at the mercy of the Food Corporation of India, which looks naturally to the food security domestically as its primary responsibility. This would lead to uncertainties in the export quantities and they do not help a stable export trade. This vicious circle has to be broken.

My reading of the prices for the current trade year would be: 100B at US$195 PMT; Non-brokens at US$220-225 PMT.

5. Do you think there is any key threat to your business? How do you propose to tackle it?
The key threat to our (Indian) business is more internal than external. There are as many as eight regulators coming between the producer and the exporter adding costs at each stage in the supply chain for exports. This could be tackled if the government has the will to reduce such onerous regulatory burden. The vested interests in the Government are preventing purposeful interventions in this regard. One way of tackling it would be to set up rice boards where all the regulators sit at the round table and discuss in a transparent manner the interventions required for rice to be competitive in exports.

6. How does the government of your country impact your business?

The government in our country (India) significantly impacts on our business as the politically powerful states decide on procurement prices that do not hold relationship to the free markets in the name of the poor and the consumer. (Reply to Question 5 above also deals with the point.)