No Indian deal yet with Indonesia to export 1 million tonnes of rice

Indonesia has been in talks with India to import 1 million tons of rice for a long time, trade and official sources said, but no agreement has been reached yet.

Official sources in India denied signing any memorandum of understanding with Indonesia regarding rice trade as reported by some news agencies, especially the Indonesian News Agency. Antara.

Indonesian Trade Minister Zulkifli Hassan was quoted as saying Antara He said that his ministry had signed a memorandum of understanding on importing one ton of rice from India to face risks El Nino weather phenomenon.

lack of precipitation

rice growing countries, eg Thailandvietnam and india, They fear that their crops will be affected by El Ninowhich leads to a lack of precipitation and drought in Asia.

According to the Kasikorn Research Center in Thailand, a subsidiary of Kasikorn Bank, rice production in the Southeast Asian country could drop by 6 percent. In India, 37 percent of the rainfall falls during the current southwest monsoon. This led to a 14.6 percent decrease in the rice acreage as of June 16.

Also read: El Nino may not always enrich the market

Hassan said the MoU covers the price and availability of Indian rice. However, the time of purchase is not specified.

“This is just a fixed-price memorandum of understanding. The goods are there, but we didn’t buy them,” Hassan said.

“Why no noise?”

He said that the Memorandum of Understanding between the two governments already exists. “This year, if we need it, we can buy it,” he said. Hasan’s statement comes on the heels of Jakarta allowing its logistics bureau, Perum Bulog, to import two tons of rice.

However, official sources in New Delhi said that no trade agreement has yet been signed with Indonesia on the rice export pact.

Trade sources said India and Indonesia have been holding talks over the past few months but nothing has come to fruition.

“Had Indonesia signed a memorandum of understanding, do you think it would have been implemented quietly?” the merchant asked.

However, another trade source said the deal will most likely happen soon because the Rice Exporters Association (TREA) is in contact with the Indonesian Embassy in New Delhi.

Also read: Officials say G2G’s demand for broken rice comes mostly from African countries

To help get the most out of MSP

In a letter to Union Agriculture Minister Manoj Jha, TREA President PV Krishna Rao urged the center to sign a memorandum of understanding with Indonesia to export one ton of rice at “mutually beneficial prices”.

We understand that this MOU is not legally binding on either government. However, by approving these MoUs, the Ministry of Agriculture can make it easier for farmers to obtain prices above the minimum support price.”

He said that this memorandum of understanding will not only contribute to foreign exchange earnings, but will also help reduce the trade deficit “between the two friendly countries.”

One of the reasons why Indonesia, which usually overlooks the import of Indian rice, is looking to India to meet its demand for food grains is its competitiveness.

competitive prices

The price of Indian rice is $30 per ton less than rice from Thailand or Vietnam. Competitiveness though New Delhi Imposing an export duty of 20 percent on shipments.

According to the Thai Rice Exporters Association, Indian 5 percent broken white rice was priced at $453-57 per ton compared to $509 per ton and $478-82 in Vietnam.

Data from Agmarknet, a unit of the Ministry of Agriculture, shows that the weighted average price of common rice across Agricultural Products Marketing Committee yards is ₹ 2094 quintals against the MSP of ₹ 2040. For the fall marketing season beginning October 1, the MSP has been increased to $2,183.

Also read: The concentrate raises the MSP of fall crops by 5-10%; You don’t see an impact on inflation

According to the Agricultural and Food Export Development Authority, non-basmati rice exports from the country were higher at 17.79 million tons, worth $6.3 billion, in fiscal year 2022-23 compared to 17.29 million tons, worth $6.13 billion, in 2021-22.

On the other hand, exports of basmati rice increased to 4.56 million tons, at a value of $4.79 billion, compared to 3.94 million tons, at a value of $3.53 billion, during the same period.

India’s rice exports were boosted by another record production of 135.54 metric tons during the current crop season (July 2022-June 2023) compared to 129.47 metric tons last year.