EXCLUSIVE Indian rice traders stop new export deals as freight train shortage blocks shipments

Workers lift a bag of rice onto a truck at a wholesale grain market in the northern Indian city of Chandigarh on February 9, 2012. REUTERS/Ajay Verma/File Photo

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MUMBAI (Reuters) – Nearly a third of India’s rice exports for this month are stuck due to a shortage of freight trains and most traders have stopped signing February export contracts to avoid demurrage charges, industry officials told Reuters.

Slowing exports from India, the world’s largest rice exporter, has allowed rival suppliers such as Thailand, Myanmar and Vietnam to boost overseas sales at higher prices.

The slowdown in exports may force the Indian government to increase purchases from farmers.

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Traders said shipments of more than 500,000 tons of non-basmati rice to be transported to ports on India’s east coast from the central state of Chhattisgarh have been halted due to a shortage of freight trains.

It is part of about 1.5 million tons of rice that India plans to export this month.

Goods cannot be moved from production centers to ports due to the scarcity of freight trains,” said Nitin Gupta, Vice President of Rice Trading in Agricultural Commodities at India’s Olam.

“There is no clarity on the availability of trains, so no one is offering new shipments.”

Railway authorities have shifted carriages to charge fertilizer and service coal-fired thermal power plants to ensure adequate power supplies this winter after power stations ran out of coal a few months ago.

Himanshu Agarwal, CEO of Satyam Balajee, India’s largest company, said delays in Indian shipments are hitting exporters hard, with ship rates rising to $30,000 a day and some exporters needing to pay up to $500,000 in delay fees. , eliminating their entire margin. rice source.

Traders began quoting higher prices for overseas shipments to cover higher delay fees, and prices for a batch of broken parboiled rice rose 5% to $380 a ton, the highest price in six months.

Krishna Rao, President of the Rice Exporters Association of India, the price hikes and shipping delays are prompting some buyers to switch to competing suppliers such as Thailand and Myanmar.

International rice prices rise due to delays in Indian exports

Broken rice prices rose 5% in Thailand last week to their highest since mid-July 2021 at $404-405 a ton.

“We have asked the Department of Trade and Industry to help us by increasing the availability of railway cars,” Rao said.

India’s Ministry of Commerce and Industry and the Ministry of Railways did not immediately respond to requests for comment on Monday.

Traders used to switch to road transport in the absence of rail cars, but truck drivers have raised freight rates dramatically in the past six months after diesel prices jumped to a record high, a trader at a global trading company said.

“At least for the upcoming month’s shipments, Asian and African buyers are shifting to Thailand, Myanmar and Pakistan. Indian exports may decline in the March quarter,” he said.

India cornered nearly half of global rice shipments in 2021 as its exports jumped 45% from 2020 to a record 21.4 million tons, or more than the combined exports of the next three largest exporters, Thailand, Vietnam and Pakistan, according to provisional government data. Read more

Himanshu of Satyam Balaji said rice production in India has jumped to a record high this year and prices are still competitive, but logistical bottlenecks are limiting exports.

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Rajendra Jadhav reports; Editing by Susan Fenton

Our Standards: Thomson Reuters Trust Principles.

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