India’s rice exports forecast to hit record 12.3 million tons, thanks to Bangladesh

The boost in shipments from the world’s top exporter of the grain is set to extend into 2018 as Bangladesh and Sri Lanka continue to buy aggressively amid depleting inventories in Thailand. (Reuters)
Updated 10 January 2018
0

India’s rice exports forecast to hit record 12.3 million tons, thanks to Bangladesh

MUMBAI/DHAKA: India’s rice exports likely jumped 22 percent in 2017 to a record 12.3 million tons as neighboring Bangladesh ramped up purchases after flooding hit its crops, industry officials said.
The boost in shipments from the world’s top exporter of the grain is set to extend into 2018 as Bangladesh and Sri Lanka continue to buy aggressively amid depleting inventories in No. 2 exporter Thailand, the officials said.
“Bangladesh was actively buying throughout 2017. It offset the impact of slightly weaker demand from African countries,” said M. Adishankar, executive director at Sri Lalitha, a leading rice exporter located in the southern Indian state of Andhra Pradesh.
Bangladesh’s purchases likely lifted India’s non-basmati rice exports by 38 percent in 2017 to 8.4 million tons and total exports to 12.3 million tons, the officials and exporters said. That would surpass 2014’s record of 11.5 million tons.
They based the 2017 export figures on their estimates for December shipments plus previously issued government data for January to November. Government numbers for December are expected to be released around the start of next month.
India exports non-basmati rice mainly to African and Asian countries and premium basmati rice to the Middle East, the US and Britain.
Traditionally the world’s fourth-biggest rice producer, Bangladesh emerged as a major importer of the grain in 2017 after floods damaged crops and pushed domestic prices to record highs.
Bangladesh sourced more than 80 percent of its 2017 imports of 2.4 million tons from India, said Badrul Hasan, head of Bangladesh’s state grains buyer.
The South Asian nation’s overseas rice purchases are likely to remain robust until supply rises after its summer crop, also known as Boro, in May, Hasan said.
Boro contributes more than half Bangladesh’s typical annual rice output of around 35 million tons.
Last year Bangladesh reduced import taxes on rice to boost private buying. It also bought rice from India in state-to-state deals to quickly raise supplies and try to rein in prices.
But rice prices stayed high in Bangladesh despite the largest imports in nearly two decades, which will encourage farmers to expand the amount of land used to cultivate the staple crop, Hasan said.
India’s rice exports in 2018 depend largely on non-basmati shipments as basmati exports are likely to remain more-or-less steady at around 4 million tons, said Vijay Setia, president of the All India Rice Exporters’ Association.
“Non-basmati exports depend on stock positions in importing countries like Bangladesh and Sri Lanka,” Setia said.
African nations stepped up buying from Thailand last year, but that could ease in 2018 as state stockpiles are depleted in the Southeast Asian country, potentially boosting appetite for Indian supply, said a Mumbai-based dealer with a global trading firm.
“For key markets like Bangladesh and Sri Lanka, India has freight advantage over Thailand. This will help even in 2018,” the Mumbai-based dealer said.


Saudi stocks receive landmark emerging markets upgrade from MSCI

Updated 21 June 2018
0

Saudi stocks receive landmark emerging markets upgrade from MSCI

  • Market authorities in Saudi Arabia have introduced a series of reforms in the past 18 months
  • MSCI’s Emerging Market index is tracked by about $2 trillion in active and global funds

LONDON: Saudi Arabian equites are poised to attract up to $40 billion worth of foreign inflows, following a landmark decision by index provider MSCI to include the Kingdom’s stocks in its widely tracked Emerging Markets index.

"MSCI will include the MSCI Saudi Arabia Index in the MSCI Emerging Markets Index, representing on a pro forma basis a weight of approximately 2.6% of the index with 32 securities, following a two-step inclusion process," the MSCI said in a statement late on Wednesday night Riyadh time.

“Saudi Arabia’s inclusion in MSCI’s EM Index is a milestone achievement and will likely bring with it significant levels of foreign investment,” Salah Shamma, head of investment for MENA at Franklin Templeton Emerging Markets Equity, told Arab News. 

“It is a recognition of the progress Saudi Arabia has made in implementing its ambitious capital markets transformation agenda. The halo effect of such a move will be felt across the stock exchanges of the entire Gulf Cooperation Council (GCC).”

Market authorities in Saudi Arabia have introduced a series of reforms in the past 18 months to bring local capital markets more in line with international norms, including lower restrictions on international investors, and the introduction of short-selling and T+2 settlement cycles.

Such reforms prompted index provider FTSE Russell to upgrade the Kingdom to emerging market status in March, opening the country’s stocks up to billions worth of passive and active inflows from foreign investors.

MSCI’s Emerging Market index is tracked by about $2 trillion in active and global funds. The inclusion of Saudi stocks in the index, alongside FTSE Russell’s upgrade, is forecast to attract as much as $45 billion of foreign inflows from passive and active investors, according to estimates from Egyptian investment bank EFG Hermes. 

The upgrade announcement was widely expected by the region’s investment community, following a similar emerging markets upgrade announcement by fellow index provider FTSE Russell in March. 

“MSCI index inclusion will be a historic milestone for the Saudi market as it will allow for sticky institutional money to make an entry in 2019 which will help deepen the market,” said John Sfakianakis, director of economic research at the Gulf Research Center in Riyadh.