Indian rice shipments stuck at ports


Workers unload sacks of rice from a delivery truck at India’s main rice port at Kakinada Anchorage in the southern state of Andhra Pradesh, India. PHOTO: REUTERS/File

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Workers unload sacks of rice from a delivery truck at India’s main rice port at Kakinada Anchorage in the southern state of Andhra Pradesh, India. PHOTO: REUTERS/File

At least 20 ships are waiting to load around 600,000 tonnes of rice at Indian ports as surprise export restrictions from New Delhi locked in cargoes for nearly two weeks, forcing sellers to pay demurrage, industry officials told Reuters.

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India banned exports of broken rice and imposed a 20 percent tariff on exports of various other crops on September 8 as the world’s largest exporter of the grain seeks to boost local supplies and calm prices after below-average monsoon rains curtailed planting.

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The surprise is moving trapped cargo that was brought to ports or in transit before the government made the announcement, said BV Krishna Rao, president of the Rice Exporters Association (TREA).

“We have asked the government to grant a concession for this transit cargo as we pay high demurrage,” he said.

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Aside from 600,000 tons of rice awaiting loading on moored vessels, another 400,000 tons of rice are stuck in port warehouses and containerized freight stations (CFS), although contracts are backed by letters of credit (LCs), he said.

Shipments of broken rice are stuck due to the ban, while in the case of white rice, buyers and sellers are unwilling to pay the 20 percent tariff on the agreed price, traders said.

“When the contracts were signed, there was no export tax. With exports now subject to tax, there is a dispute over who will pay the tax on the agreed price,” a New Delhi-based trader told a global trading firm.

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Under similar circumstances, New Delhi has historically granted exemptions for contracts backed by LCs or payment guarantees issued up to the day the government made a policy change. But that didn’t happen this time.

Stuck shipments of broken rice went to China, Senegal, Senegal and Djibouti, while other varieties of white rice were bought by buyers in Benin, Sri Lanka, Turkey and the United Arab Emirates, exporters said.

India exports rice to more than 150 countries, and any reduction in supplies would add upward pressure on food prices, which are already rising due to drought, heat waves and Russia’s invasion of Ukraine.





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