Rice, black tea exports to China set to rise in 2021-22, say industry executives

China’s interest in Indian rice and black tea is on the rise. It has started importing basmati rice from India and though the volumes are not huge in this financial year, the business is expected to grow in 2021-22, said industry executives.

China had started importing non-basmati rice from December-end and the industry expects to close the financial year at month-end with total exports of about 400,000 metric tonnes to the country.

Black tea is another commodity that China, a green tea drinking nation, is buying from India. In 2020. it bought 11.44 million kg tea from India. Since the beginning of 2021, China has not placed any orders, but tea exporters expect orders to come in from April with increased arrival of new season teas.

“China has started taking small quantities of basmati rice along with non-basmati rice. This is for the first time they have looked at basmati rice,” said Gurnam Arora, joint managing director, Kohinoor Foods.

Industry executives said China is importing basmati from India for catering to the Indian diaspora living there. “There are a number of Indian restaurants in China where Indians flock. Most likely, they are lifting this rice for meeting this requirement,” said a senior executive, who did not wish to be identified.

China had earlier avoided buying rice from India, citing quality issues, and had traditionally imported rice from Pakistan, Thailand, Vietnam and Myanmar. However, this year, due to limited supply and significant increase in prices of rice in these countries, China started looking elsewhere for rice.

"This is for the first time, China has imported rice from India. They may increase buying next year if they are satisfied with the quality," said BV Krishna Rao, president of the Rice Exporters Association.

“From December onwards, they have taken 100,000 tonnes of rice each month. We hope that we will close the financial year with an export of 400,000 tonnes of rice exports to China,” said Rao.

India has offered a price of $300-350 per tonne to the Chinese buyers, lower than the ruling global prices of $390-400 per tonne.

“There are hardly any teas in the market. Chinese orders will start coming in from April onwards when new season teas will start arriving in volumes. We are expecting business as usual with China this year,” said Mohit Agarwal, director, Asian Tea.

The rice trade has seen more buyers from South America, Eastern Africa and Southeast Asia picking up rice from India. Traders are hopeful that rice exports including both basmati and non-basmati types may touch 16-17 million tonnes in this fiscal, as against 9.48 million tonnes in the previous fiscal.

Consumption of black tea in China is also on the rise. Despite the pandemic and fall in production of Indian black tea due to the lockdown and restrictions, China imported 11.44 million kg of teas from India in 2020 compared to 13.46 million kg in 2019.