Indian Rice Industry Key Pointers - India to replace China as Top Rice producing country in 2022-2023
India unseats Brazil as No.1 food supplier to Arab nations after 15 years
*Rice is one of the top exports from India*
*Biggest Beneficiaries will be Basmati Rice exporters like LTFoods, KRBL, Chamanlal Setia*
Biggest Beneficiary will be DAAWAT (LT Foods)
1) Global Basmati demand to pick up at a CAGR of 7-8%. As the Covid situation improves & opening up of multiple nations will lead to further demand pick up during coming festive season and the new year.
2) Support to prices once EU exclusive deal goes through
3) Not too many organized players in Branded segment which means more volumes for branded players. Ebita of approx 12-14% in branded segment as against 4-5% in non branded segment. There are hardly 2-3 branded large players operating in the Basmati Rice segment from India.
Supply side situation:
1) Not much of carry forward stock of basmati left from last year
2) Current year paddy crop of varieties of 1509 and 1121 is approximately 20-25% lower which will be impacted further due to heavy rains in paddy growing areas just before harvest season.
3) New crop is selling in mandis at approximately 35-40% higher than last year ex 1509 variety being sold at 2800/- to 2900/- per quintal as against 2100/- per quintal last year.
3) There has been increase of 10-12% in prices of basmati rice in open market (non branded) in last couple of weeks
4) Demand for Indian Basmati rice is highest in the last 5years, as Developed nations look for Alternatives outside of China, Brazil, Bangladesh, Indonesia & Pakistan. India commands close to 30-35% of Global market share in Rice production. It is expected soon, India will command 50% market share in the Global Rice industry.
*India all set to take-over China in rice production*
*India will be Top producer of Rice Globally, overtaking China and Indonesia*
Disruptions in Chinese cities like - Jiangsu, Anhui, Hubei, and Sichuan will significantly impact Rice production output. Due to a number of factors such as climate change, scarcity of labor, and the overuse of chemicals and fertilizers, rice production has fallen significantly in China. China will likely cater to domestic consumption and the exports will be significantly reduced due to drastic fall in production.
China, India, and Indonesia are the top three rice producing countries in the world.
In 2018 and 2019, China produced over 148/177 million metric tons of milled rice.
During the years 2015-2016, the total rice production of India exceeded 104/120 million tons. West Bengal is the largest rice producing state in India.
*It is expected India will overtake China with Rice production over 150MMT in 2022 and 200MMT by 2023*
*India will cater to 50% of Global Rice demand by 2023-24; huge structural development happening in the Rice industry in India*
*Biggest Beneficiary will be DAAWAT LTD (LT Foods)*