India: Congestion at Kandla port slows rice exports, pushes up prices

• Cargo clearance at Kandla stretches to 35-40 days
• Indian non-basmati rice prices rise 13% in one month

India’s rice exporters are facing severe logistical disruptions at Kandla port, with cargo clearance taking 35-40 days, threatening timely shipments to overseas markets. The delays are particularly concerning as the port handles bulk cargoes, including steel, iron, coal, and urea, and shipments of perishable commodities such as rice.

Volumes at anchorage increased by 53% w-o-w to 372,500 tonnes (t) in the week ended 7 August, as per BigMint’s vessel line-up data. From Kandla, exports have slowed in the previous few weeks, with nil volumes shipped over 1-7 August compared to 23,000 t over 25-31 July and 48,050 during 18-24 July.

Container shortage limits export potential

The disruption, which has continued since March, has been compounded by an acute shortage of containers at Kandla and Mundra ports, resulting in an inventory build-up of around 50,000-80,000 t in port warehouses. These ports handle a large share of containerised basmati and non-basmati rice shipments from north India, with pressure potentially increasing as fresh-crop arrivals begin in October.

The logistics constraints could limit India’s ability to respond to a potential increase in global demand. Despite El Niño conditions, India’s rice production is expected to rise from around 151 million tonnes (mnt) to 153 mnt, creating an additional surplus of nearly 2 mnt, while stocks are estimated at around 27 mnt above buffer requirements.

Logistics disruptions lift non-basmati rice prices

The ongoing export disruptions are also affecting global rice prices. Indian non-basmati rice prices have increased by around 13% over the past month, rising from 1st week of July from $340/t to the current price of  $385/t  as export availability declined.

Angola permit deadline puts shipment at risk

The Indian Rice Exporters’ Federation (IREF) has asked for priority berthing of Mv Orient Glory, which arrived at Kandla on 6 August, with capacity to load around 26,750 t of rice for Angola. The federation warned that Angola’s import permits are valid only until 31 August and that delays in berthing, loading, and sailing could result in commercial losses, contractual liabilities, and possible rejection of consignments.

Outlook

Global rice supply is expected to tighten, with production projected to decline by around 9 mnt while import demand could rise by nearly 4 mnt. India is well positioned to meet part of this supply gap, supported by ample stocks, higher production and strong export capacity. However, continued congestion and container shortages at Kandla and Mundra have constrained India’s export flows and delayed shipments. Resolving these logistical bottlenecks will be key for India to fully utilise the expected increase in global demand.