Vidarbha’s rice exports suffer as shipping cos halt bookings
Rice exports from Vidarbha have fallen sharply as shipping lines halt fresh bookings and freight rates surge by $500 per tonne to $2,000–2,200. Port congestion, container shortages and higher fuel costs have disrupted trade, prompting demands for export logistics subsidies.
Nagpur: In a fresh crisis amid the partial opening of the Strait of Hormuz, shipping liners have nearly stopped taking fresh bookings of cargo from India. The development has affected Vidarbha’s rice exporters as the volumes have come down drastically.
Adding to the crisis, the freight charge has increased by $500 a tonne in just over a fortnight. This includes a hike of $250 that came four days ago, said trade sources. This takes the freight charges anywhere between $2,000 and $2,200. In shipping jargon, it is called a general rate increase (GRI), which is a common dictum followed by all shipping lines.
Rice has a major share in exports from Vidarbha and other central Indian states. The non-basmati and parboiled rice grown here is shipped to West African countries where it makes part of the staple diet for the general public.
The ships carrying rice to West Africa travel through the Cape of Good Hope, and the Strait of Hormuz does not come under the route. Yet a complex logistics crisis has led to the situation, say sources in the shipping industry.
“The standstill came at a time when rice exporters had a golden opportunity due to the falling rupee. However, a sudden increase in the freight charges and stoppage of bookings has brought the exports crashing down,” says Shivkumar Rao of M/s R&Y Logistics, a forwarding company from Nagpur.
With the imports coming down, ships are reaching the Indian ports with empty containers. This has led to shipping companies increasing freight charges. The general availability of containers has also been hit due to congestion at ports preventing ships from anchoring, Rao said.
Rice exporters TOI talked to also confirmed a sharp decline in business. Mukesh Jain of M/s Sponge Enterprises Private Ltd said the high freight charges, coupled with higher diesel prices, have severely impacted the exports from Vidarbha and Chhattisgarh. The Rice Exporters Association is demanding that govt should give a logistics subsidy on exports to offset the higher freight.
President of Vidarbha Industries Association (VIA) Prashant Mohota said freight charges come to around 8% of the export cost for the rice traders, and a sudden increase can leave a major impact on the costing.
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Source : The Times Of India
