1 / 9

Salient Features of the International Rice Market

Salient Features of the International Rice Market. Trade of Residual Supply - Govt. in most rice growing countries protect both consumers and farmers from price variation by maintaining non- price barriers between domestic and international markets

Download Presentation

Salient Features of the International Rice Market

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Salient Features of the International Rice Market • Trade of Residual Supply - Govt. in most rice growing countries protect both consumers and farmers from price variation by maintaining non- price barriers between domestic and international markets • As a result, international trade in rice has become a function of excess domestic supply over demand • The trade is not much responsive to world prices.

  2. Salient Features of the International Rice Market • Thin International Market - world rice market is thin in relation to world production - Less than 5 percent of annual rice production is traded internationally. - Bulk of rice production occurs in the Asian countries which are also major rice consumers

  3. Salient Features of the International Rice Market • High price volatility - Thinness of the international market leads to increased price volatility - It creates added incentives for self sufficiency in rice, further thinning the market

  4. Salient Features of the International Rice Market • High search and transaction cost - fluctuation in the participants’ share in the market - absence of fixed trade channel leads to high search and transaction cost - Each decision to enter the market generally requires a new search for trading partner.

  5. Salient Features of the International Rice Market • Non-homogenous commodity - different varieties and grades are preferred by different consumers - Many attributes influence the value of the produce resulting in large price differentials among different grades

  6. Indicators of global competitiveness • Basmati rice • Location: karnal, Haryana • Exported from kandla port • NPC = 0.89 • EPC = 0.88 • ESC = 0.74 • DRCR = 0.48 • Although basmati rice is sufficiently price competitive, India has failed to perform sufficiently well in rice trade

  7. Perspective on rice exports • Supply constraints - Need to augment production of basmati rice - Backward and forward linkages to farmers • Procurement constraints - Lack of requisite statistics for purchase planning by the exporters - High incidence of local taxes/charges

  8. Perspective on rice exports • Processing constraints - Excessive investment in rice milling capacity - milling capacity of 286 million tons of paddy against production of about 120 million tons. - low cost of installation and replacement of rice huller - low capacity utilization (180-220 days in a year)

  9. Perspective on rice exports • Low incidence of modern rice mills • Levy disincentives to exporting rice mills - most exporters are merely traders instead of processor-cum-exporter • Exporter pre-qualification is absent - only registration with APEDA - most rice traders are fly-by-night operators, striving to maximize short term gains

More Related