The year 2020 has been a disaster for the economy, all kinds of commodity production, supply and even the export-import, as all started to move towards of path of eventual recession at the stroke of midnight 25-26 March, when nationwide lockdown was initiated. However, out of all the commodities/industries, there were some, which did not lose it shine to COVID times. One such commodity is rice.
Discussing some stats and figures, India has been the leading exporter of rice in the entire world, proceeding Thailand, USA and Vietnam. Until 2019, India accounted for 32.5% of world’s total rice exports, which was $7.1 Billion worth. Certainly, a big amount since next on the list was Thailand at $4.2 Billion worth of exports. Major importers from India were Nepal, Bangladesh, Senegal and few gulf countries. Centuries of cultivation and consistency has brought us this monopoly and we gained even more control in the times of pandemic in this particular commodity.
As we saw, all industries and economic activities stopped immediately after lockdown was initiated, the stock market and all indices plummeted and eventually leading us to a clear recession. However, the farming related activities were quite unaffected by this situation. Although, all sectors were bleeding, one particular grain, RICE showed a drastic trend of disagreement to others. It gained value and showed unexpected growth as well, in contrast to other export leaders as mentioned above. During the major downtrend of stock market, major rice brand companies like LP Foods and KRBL did follow the trend but not for long. The grain’s supply in India as a whole increased, owing to the surplus, production and consistency in cultivation, whereas countries like Thailand and Vietnam were not able to maintain a steady production, which showed its effects in the latter half of 2020. Price of the grain increased in both the countries, and this has led to a situation where Vietnam and Thailand are looking towards India for supply. Complimentary to this, it is also expected that countries to which they exported to will also be open to Indian exports.
In the times where we have seen negative GDP growth figures, the exports of rice from Jan-Oct 2020 were 143% of entire 2019 export. For the entire year, the growth in exports is expected 42% for the commodity. The stock market action discounted all these events from May, wherein most of the brands in this segment showed rapid recovery of up to 500% growth between March crash and August results. The possibility of export to the other major leaders of rice export in the world can show massive ripples in the market as the action remains positive and all-time high.