Benin struggles with supply glut following India's export surge

Since India released rice export restrictions in October 2024, Benin, one of the biggest destinations for Indian parboiled 5% rice, has been struggling with an oversupply situation, leading to a continuous downtrend in prices, sources told Platts, part of S&P Global Commodity Insights, on April 17.

In September, India slashed the export duty on parboiled rice from 20% to 10%, lifted the ban on non-basmati white rice exports, and introduced a minimum export price of $490/mt in response to swelling granaries and a bumper harvest expected from the upcoming new Kharif season crop. The export duty on PB rice was further scrapped on Oct. 22.

Exports to Benin surge

With the duty cut, exports to Benin from India saw a monumental increase. From October 2024 to January 2025, India exported 753,463 mt of non-basmati rice to Benin, up from 119,225 mt of rice exported in the same period the previous year, according to India's Agricultural and Processed Food Products Export Development Authority data.

India's exports of non-basmati rice to Benin surged amid India's bumper Kharif crop and led to an oversupply, from which Benin is struggling to recover currently.

"Benin imports jumped 50% since last October when India removed restrictions on exports of rice. A similar situation is there for Nigeria. On top of it, cashew and soybean oilseeds exports weren't happening in this time period. Cashew season is April/May and West African soybean has been getting stiff competition from India's soybean meal due to competitive pricing," a Cotonou-based importer said.

Downward trend in export prices

The Platts-assessed Indian PB 5% FOB and Long Grain Parboiled Milled Rice 5% STX CFR West Africa prices hit a nearly two-year low on April 16.

Platts assessed the Indian PB 5% price at $385/mt FOB on April 16. The price was last lower on June 5, 2023, at $380/mt FOB, and at $390/mt FOB on June 6. Long Grain Parboiled Milled Rice 5% STX CFR West Africa was assessed at $434/mt on April 16. The price was last lower on June 5, 2023, at $430/mt CFR West Africa.

Benin market under pressure due to higher rice imports

"Cotonou market requires 100,000 mt of rice on a monthly basis. However, currently, there are six to seven breakbulk ships standing to be unloaded at Cotonou, while two to three ships are in transit. The market would rebound not before July, only once all the imported rice supply is distributed", an Indian exporter said.

The current price for a 50 kg bag is 16,800 CFA Franc, which declined by 7% from February, according to sources.

"The Cotonou market has been bearish because of delayed remittances from the central bank. Many essential banks such as the central bank give a certain amount for exports from their reserves. However, a lot of imports are coming in, but not many exports happening in the period, creating a shortage of foreign currency, further pressuring the reserves and delaying remittances," a Cameroon-based importer said.

Quick respite unlikely amid India's record production

An Indian exporter from a major multinational company said that the oversupply situation would persist for another two months, and the market would see a respite after that as shipment volumes have come down.

According to the US Department of Agriculture's latest rice outlook report, India's production for marketing year 2024-25 (October-September) is estimated at 147 mil mt, up by 6.7% year over year. The record harvest area of 51 million hectares is up by 7% year over year.

India is forecast to export 22.5 million mt of rice in MY 2024-25, up 56.25% year over year, according to Platts data.