India's Rice Reserves Surge, Setting Stage for Export Dominance

India's government rice reserves hit a record high, driven by increased paddy procurement. With 57.57 million tons of rice stockpile, India could expand its export leadership, impacting rival suppliers. Despite weak export demand, a depreciating rupee aids competitive pricing, while wheat reserves also remain substantial.

India's rice reserves have reached unprecedented levels, according to government data, as state-controlled agencies have significantly increased their new-season paddy crop procurement. The largest-ever December inventory rise of nearly 12% positions India, the world's top rice exporter, to potentially heighten export activity, exerting pressure on competitors like Thailand, Vietnam, and Pakistan.

The substantial 57.57 million metric tons of rice, inclusive of unmilled paddy, far surpasses the government's forthcoming target. Wheat stocks also show growth, increasing to 29.14 million tons from last year's 20.6 million tons. Market trends reveal state agencies are compelled to purchase ample quantities due to depressed market prices compared to government-fixed minimum prices, a global trade house dealer in New Delhi noted.

Despite heavy state acquisitions, export-ready stock remains, driven by a devalued rupee enhancing foreign sales profitability. India's removal of export restrictions last March boosted rice shipments by 37% in this year's first 10 months, with expectations from the Rice Exporters Association for a 25% annual rise to 22.5 million tons. This scenario assists India in balancing its food grain pricing strategy effectively.

(With inputs from agencies.)