Abstract
In December 2019, Vishal H Mistry, the founder of Jalaram Rice Mills Private Limited (JRMPL), a rice-exporting firm in Ahmedabad, is facing some dilemmas concerning the export of rice. Currently, the firm is exporting non-basmati rice to Russia and South Africa. He received a bulk order for non-basmati rice from a new Russian firm. Based on his experience in the field, bulk orders are always risky, as the likelihood of the order getting cancelled in the last moment could put him at very high risk. Similarly, he is confused about the selling price of the rice. Compared to that between India and South Africa, the exchange rate between India and Russia was experiencing more significant fluctuations in recent years. The appreciation of the Indian currency against that of the importing countries made the export costlier for Mistry. This was happening in a context where a severe price competition in the importing markets existed. Since Mistry is a small exporter, he does not have much ability to reduce the price due to the lack of monopoly in the importing market. Therefore, Mistry is a price-taker and not a price-maker in the world market. Will he accept the order? If so, at what price?
Additional Information
| Product Type | Case |
|---|---|
| Reference No. | CMA0820 |
| Title | Jalaram Rice Mills Private Limited: Vishal H Mistry's Dilemma |
| Pages | 16 |
| Published on | Dec 31, 2019 |
| Authors | Varma, Poornima; Jena, Sanjay Kumar; |
| Area | Centre for Management in Agriculture (CMA) |
| Learning Objective | To provide students with a theoretical understanding of pricing-to-market behaviour (known as PTM). To provide students with theoretical knowledge about the exchange-rate pass-through and export pricing behaviour. To provide an understanding of the behaviour of an exporter during currency appreciation and depreciation. To provide an understanding of the difference between price-maker and price-taker while trading a product in a global market. To deepen knowledge about various product-specific standards such as sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs) affecting exports from developing countries such as India. |
| Access | For All |
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