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Are Shipping Issues To Be Blamed For Hampered Rice Exports Of India?

  • Date posted : February 26, 2022

Although new prospects are opening up for Indian rice exporters, particularly non-basmati rice, they are focused on completing their contracts due to logistical challenges.


After being stable in December, freight prices have begun to rise again, jumping 10% in the first week of January, causing new concerns for exporters of basmati rice, tea, textiles, and leather goods, among others. Consignment waiting times at ports have grown to more than a month, up from 15 days.


Due to a new wave of COVID-19, a sharp increase in crude oil prices, and a massive bottleneck at multiple ports in China, the United States, and Europe, shipping prices have begun to surge once more. Due to unforeseen delays in cargo clearance at various ports, industry sources estimate a 15% to 20% rise in sea freight rates for outgoing cargo from Asia to North American or European countries. Trans-shipping ports in Asia, such as Singapore and Hong Kong, are highly congested, with many vessels waiting to dock for their re-route. With this increase, the average export cargo price for a 40-foot container from Mumbai, India, is anticipated to be USD 4,900, with Mundra and Chennai coming in at USD 5000 and $5200, respectively.


Several shipping companies have suspended operations in at least three Chinese ports, including Shanghai and Shenzhen, that are still partially shut down. Before resuming operations, the shipping lines stated that they were re-examining the situation. Cargo prices are predicted to remain firm for the next few weeks with the approach of events, the Chinese Lunar New Year celebration and the Winter Olympics. Increasing crude oil costs also aided the sudden rise in freight charges. India has begun to use diplomatic channels to encourage oil-producing nations to raise output to lower prices.


In light of issues with Myanmar, India, the largest rice exporter and the second-largest producer of the world, may smell commercial prospects, according to the international export-import official. 


Vietnam, the third-largest exporter of the world, was buying rice cargoes from India, just like Sri Lanka and Indonesia. The Philippines may soon have to rely on India for rice.


TREA’s Krishna Rao said, “This will add to additional demand for Indian rice although we are looking at ways to complete our contracts, particularly with freight and container charges increasing.”

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