India’s rice exports to be hit this fiscal
The government’s decision to impose a ban on exports of broken rice and 20% export duty on non-basmati ‘white’ rice varieties from Friday is expected to hit India’s grain exports prospects, exporters said.
Urging the government to provide transitional relaxation for consignments on transit, All India Rice Exporters Association (AIREA) said “this sudden action will damage the Indian exporters image in international trade as any contracts for shipments are done 2-3 months in advance,”.
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In a communication to Directorate General of Foreign Trade, V Krishna Rao, president, AIREA, said cargo for the rice exports are procured from various mills and stock lying in mill godowns and ports all over the country.
“Importers would delay their orders of white rice as our rice has become expensive following the imposition of exports tax,” V Krishna Rao, president, AIREA, told FE. Prior to the ban India was exporting white rice at around $ 350 – $ 360 a tonne which would not cost more than $ 400 a tonne following the imposition of export tax. Buyers would shift to Thailand and Vietnam, Rao said.
Exporters say that out of total non-basmati rice exports of 17 million tonne (mt) in 2021-22, share of white rice was around 60% and rest of the shipments were par-boiled rice which has been exempted from export duty. Basmati rice has also been exempted for export duty.
Food Secretary Sudhanshu Pandey said there has been ‘mind-boggling” increase of exports of broken rice which had caused domestic shortage and increased poultry and feed meal rates. Broken rice is largely meant for the non-human consumption and it is used as a feed in the poultry industry.
According to trade estimates, broken rice shipment has a share of around 15% in the total non-basmati rice export of 17 mt in 2021-22.
“As the world’s biggest exporter of rice, India’s move to stabilise domestic prices over global demand will likely have near-term inflationary consequences, especially within the region,” Rahul Bajoria, MD & Chief India Economist, Barclays
India has been the world’s largest rice exporter in the last decade — export earnings stood at $ 8.3 billion in 2020-21 and $ 9.6 billion in 2021-22.
According to the commerce ministry data, India’s value of rice exports rose 12% to $ 3.6 billion in the first four months of the current fiscal compared to previous year.
Out of the 21 mt of rice shipment in 2021-22, India exported more than 17 mt of non-basmati rice and the rest of the volume was aromatic and long grain Basmati rice. In terms of volume, Bangladesh, China, Benin and Nepal are five major export destinations of rice.
India is the world’s second biggest rice producer, after China, accounting for more than 40% of the global rice trade. India exports rice to over 150 countries,
