With the Philippines cutting import tariff on rice to boost supplies, Indian exporters see an opportunity to ship out more of the foodgrain to the South-East Asian nation, one of the largest grain buyers in the region.
According to reports from Manila, the Philippines last week lowered the most favoured nation tariff on rice imports to 35 per cent from 40 per cent for in-quota purchases and 50 per cent out-quota volume for one year.
For the past couple of years, Indian exporters, who faced higher rice import tariff of 50 per cent in the Philippines, have been pursuing with Manila for equalising the duty structure. However, with their traditional suppliers such as Vietnam and Thailand facing supply constraints, Manila has been forced to lower the tariff to keep the cereal prices under check.
“It’s a good development for us. We are now at par with other ASEAN countries,” said BV Krishna Rao, President of The Rice Exporters Association. “We are still awaiting the actual orders,” Rao said adding that this will open up a market of around half a million tonnes in Philippines.
Market size
The annual rice import market in Philippines is estimated at around 2.5 million tonnes. The high quality rice market is around two million tonnes, while the lower quality is around half a million tonnes. Vietnam and Thailand supply mainly the high quality fragrant and glutinous varieties to the Philippines.
The Indian Basmati rice doesn’t find major takers in the Philippines as it is considered expensive compared to Thai Jasmine and other fragrant varieties. While Basmati is priced at $1,000-1,200 per tonne, the Thai varieties are available at $700 per tonne.
Indian rice exports to the Philippines have faced a volatile trend in recent years (see table). “It is a good market in the long run, where we can improve our market share,” Rao said.
Source : The Hindu Businessline
