Export of Rice from India: Performance and Determinants§

Abstract

The study has examined the growth performance and identified determinants of rice exports from India with special reference to basmati rice during the period 1980–81 to 2012–13. Compound growth rate, instability index and Markov chain analysis, were applied to estimate trend, and instability and the project export to different countries. The time series data were made stationary before estimating the determinants of Indian rice export. The study has observed that rice contributed substantially to the national income during the study period. The higher growth observed in value of basmati rice export (15.87%) was due to higher growth in unit value than quantity of export (7.55%) during 1980–81 to 2012–13. The growth rate of unit value of rice export was higher in period I (13.48%) than period II (5.06%). The growth rates in export of non-basmati rice in terms of quantity, export earnings and unit value were 10.87 per cent, 17.74 per cent and 6.20 per cent, respectively during the study period. The instability index has been found highest for quantity (43.37%) in case of basmati rice and value (141.36%) in case of total rice during the entire period. The UAE has been found to be a highly preferred market for Indian basmati rice and Nigeria for Indian non-basmati rice, as indicated by the probability of retention of their previous shares. The study has projected that during 2013–14 the major markets for Indian basmati rice would be Iran and Saudi Arabia, whereas for Indian non-basmati rice, the major markets would be Nigeria and South Africa. The estimated regression model has shown that export price, international price, lagged production, domestic consumption, and exchange rate are the major determinants of rice export from India. In order to sustain in the international market, Indian export price needs to be competitive besides improvement in quality and sanitary standards.