February 29, 2008

Low freight rates gives Indian grain a leg up over Asian competition

The low freight rates that India enjoys shipping grains and oil meals to nations in the region has given it a leg up over other competitors such as China, according to the Economic Times of India.

Cheaper rates have boosted Indian exports of these commodities to Africa, South East Asia and the Middle East, the paper reported.

Freight charges from China to Africa could be double that of charges from India to the same destination.

Freight rates, which has more than doubled in the past few years have become a major factor of concern among grain shippers.
 

Earlier, China used to have the price advantage but this has been offset by lower freight charges offered by India, according to the Agricultural and Processed Food Products Export Development Authority (APEDA).

India has contracted to export around 1.5 million tonnes of corn and 3 million  tonnes of soymeal for the year 2007-08 so far, thanks to its freight advantage. Southeast Asian countries which previously imported from South America, such as Malaysia, Vietnam and South Korea, along with Middle East countries are increasingly looking at India for grains and oil meals he said.