As per the report of Drip Capital, rice exports for FY20 expected to fall due to geo-political situations, tighter trade norms and higher MSP on the commodity by government.
US-based trade finance company Drip Capital has released a report detailing the state of India’s rice exports. Chalking out detailed insights from proprietary data and on-ground conversations with exporters, the report analyses the country’s rice shipments, with Basmati rice occupying a major share.
Rice contributes to over 2% of overall exports within the Indian export basket
Within the Indian export basket, rice contributes to over 2% of overall exports. The sector reported a CAGR of 14% between FY2010 to FY2019. However, rice exports this year have seen a decline across the globe with a major dip coming from the Middle East due to heightened geopolitical tensions. A resulting fall in prices has further aggravated the sector’s woes.
Rice exports have grown at a CAGR of nearly 14% between FY10-19
Haryana is the top Basmati rice exporting state in the country with a CAGR of 3% between FY16-19, shipping US$2,410 million in FY19 alone. Gujarat is second with shipments of US$1,106 million in FY19; however, Gujarat has posted an impressive CAGR of 47% over FY16-19. Other major contributing states are Delhi, West Bengal and Andhra Pradesh.
Rice being a Kharif crop (August – November) shows a clear seasonal pattern in exports as well. The four months post-harvest (December – March) see over 40% of annual exports as compared to the rest of the year. The current year’s (FY19-20) rice exports have also been trending much below previous years’ performance.
Pushkar Mukewar, Co-Founder and Co-CEO, Drip Capital said, “YTD exports so far are looking bleak with Iran, the biggest export market, seeing a 22% fall in shipments. Other export markets like the UAE (33%), Nepal (23%), Yemen (2%), Senegal (90%) and Bangladesh (94%) have also seen a fall in rice shipments from India. On the other hand, exports to certain nations broke from the trend to post growth, such as Saudi Arabia (4%), Iraq (10%), Benin (8%) and the USA (4%).”
About Drip Capital
Drip Capital is a California- and India-headquartered fintech company, focused on solving the working capital problem for SME exporters using technology. The company was founded by Pushkar Mukewar and Neil Kothari, both roommates at Wharton. The 120-member team now comprises of engineers, data scientists and trade finance veterans across offices in Palo Alto, Mexico City, and three offices in India – Mumbai, Delhi and Bengaluru.
Drip has strategic partnerships with a number of key export promotion organizations, including FIEO (Federation of Indian Export Organizations) and EEPC (Engineering Export Promotion Council). Drip’s working capital offering to exporters is a credit line, which ranges from US$100 thousand to US$2.5 million, depending on the exporter’s size and requirement.
