India-China deal inked, rice millers see long-term gain in Chinese market

Written by PaperDabba
Written by Harish Damodaran | New Delhi | Published: June 10, 2018 5:26:56 am

PM Modi arrives at Qingdao, China, on Saturday. PTI

With India and China signing an agreement on Saturday to amend a protocol on phytosanitary requirements, which will allow India to export non-basmati rice to China, rice millers see the opening up of the Chinese market for Indian grain as a positive sign in the long run. “Consumer preference there (in China) is generally for short-to-medium bold and sticky rice. The rice that we export is mainly long, fine and fluffy grain. Developing that market will take some time,” Vijay Setia, president of All-India Rice Exporters’ Association, said.

According to Setia, a Chinese official team had last year inspected rice-milling plants in India. “They visited 19 mills and approved 14 plants that can export as and when their market opens up. Another team is expected this month and they will inspect more mills,” he told The Sunday Express. However, Setia pointed out, the plants the Chinese officials visited largely process basmati rice for export. “Maybe at a later stage they will also look at non-basmati rice-processing facilities,” he said.

India is the world’s largest rice exporter. In 2017-18 (April-March), India shipped out 126.85 lakh tonnes of rice valued at $7,723.11 million (Rs 49,768.25 crore). That included 40.52 lakh tonnes of basmati (worth $4,165 million, or Rs 26,841.19 crore) and 86.33 lakh tonnes of non-basmati rice ($3,558.11 million, or Rs 22,927.06 crore). India’s big markets for basmati rice are Iran, Saudi Arabia, UAE, Iraq and Kuwait, while non-basmati shipments go mainly to Bangladesh, Benin, Senegal, Nepal and Sri Lanka.

Rice apart, India has for long sought access to China’s market for buffalo meat as well. A leading buffalo meat exporter, who did not want to be quoted, said: “They have been citing concerns over Foot and Mouth Disease (FMD, an infectious virus that causes blisters in hoofed animals). This, despite the fact that Telangana and Maharashtra have already been declared FMD-free and we can export out of those states. Also, the Paris-based World Organisation for Animal Health has recognised meat that is de-boned, de-glanded and acidic (pH below 6) to be risk-free.”

Significantly, out of $4,029.88 million (Rs 25,988.50 crore) worth of buffalo meat that India exported in 2017-18, as much as $2,283.43 million (Rs 14,728.88 crore) — or more than half — was to Vietnam. It is believed that the bulk of the shipments to Vietnam actually make their way to China. China technically does not import any buffalo meat from India. However, a grey market has developed in recent times, with Chinese traders reportedly using Vietnam’s Haiphong port to bring in Indian meat loaded on small vessels.

“They are already consuming our meat. Right now, we export to Vietnam at $3,300 to $3,400 per tonne free on board. From there, another $800-1,000 per tonne is spent on trans-shipment. They could save that amount by buying directly from us,” the meat exporter quoted earlier claimed. In 2016, a Chinese team had come and seen a few processing facilities here, besides visiting the Indian Veterinary Research Institute at Mukteswar and meeting officials at the Agriculture Ministry and Agricultural and Processed Food Products Export Development Authority, the exporter said.

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