Rice exporters seek government help to deal with high freight rate, container shortage

Rice exporters are searching for government intervention to shield their margins and stay aggressive as high freight rates and a shortage of containers have impacted the commerce.

Exporters have sought government assistance in transportation and advertising alongside with advantages of export-promotion schemes, VK Kaul, government director of All India Rice Exporters Association, mentioned.

“The remaining part of the financial year is the peak export season for basmati rice and we need assistance,” he mentioned.

Exporters are unable to improve costs of rice considerably for worry of dropping enterprise to different nations.

Freights on some routes had trebled in contrast with the pre-Covid time, Kaul mentioned. Freight charges to West Asia, which accounts to 75% of commerce, rose about 243% after the lockdown to $1,200-1,500 per container, whereas freight for cargo to Caribbean nations elevated 344% to $4,200-4,500 per container throughout the identical interval.

“The containers are in small supply because with drop in imports from China, the inward movement has got restricted,” Kaul mentioned.

Freight forwarding brokers mentioned there was 45-50% shortage in containers with month-to-month necessities at 30,000 to 35,000 for each basmati and non-basmati rice exports.

The rice exporters affiliation mentioned transport firms had not absolutely deployed their fleets, which decreased the supply of ships in India.

Congestion in trans-shipment ports of Sri Lanka, Singapore and Malaysia delayed Indian cargoes, mentioned BV Krishna Rao, president of the affiliation.

“The mismatch between India import and export has impacted the container availability,” Rao mentioned. “Freight rates to Africa, which is our key export market, has doubled to $2,400 per container of 25 tonne. However, we have only been able to increase the white rice and parboiled rice price by only 8-10% as we are worried that business might shift to other exporting countries.”

If the freights are rationalised and containers can be found, exports can rise to a brand new degree, mentioned Ashwani Kumar Arora, managing director of LT Foods that sells basmati rice beneath Daawat model. He mentioned there was delay of over 4 weeks in Singapore port and one week in Colombo port, making it tough for exporters.