This move could lead to lower rice prices within India.
The government banned overseas shipments of broken rice and imposed a 20% duty on exports.
The Indian government issued a notification through the Directorate General of Foreign Trade on Thursday, stating that the export of non-basmati white rice (both semi-milled or wholly milled rice, whether polished or glazed) is now prohibited. The export policy for this type of rice has been changed from free to prohibited.
Despite the prohibition on the export of non-basmati white rice, the Indian government will make exceptions for consignments that have already started loading onto ships before the notification. Before this decision, reports were suggesting the government was contemplating banning exports of most rice varieties, potentially affecting approximately 80% of India’s rice exports. While this move could lead to lower rice prices within India, it might hurt global rice prices.
As per earlier reports, the uneven distribution of rainfall in the primary rice-growing regions of the country has caused a significant increase in rice prices, surging up to 20% over the past 10 days.
Vietnam’s rice export prices reached their highest level in more than ten years due to growing concerns about the El Nino weather pattern impacting the supply. The situation was further exacerbated by India’s decision to restrict rice exports, prompting traders to anticipate even higher prices if India implements export limitations.
It’s good to hear that rice planting in India has picked up pace with the recent revival in monsoon rainfall over the last two weeks.
In September 2022, India, being the largest rice exporter globally, took measures to address production concerns. The government banned overseas shipments of broken rice and imposed a 20% duty on exports of various other grades of rice to manage the situation.
According to B.V. Krishna Rao, the president of the Rice Exporters Association (REA), the increase in paddy procurement price by the government has been a factor contributing to the rising prices. He believes that the government is holding more rice stocks than necessary for welfare schemes, and therefore, there is no need to restrict rice exports.
Despite these statements, India’s rice export prices have been consistently rising for the seventh consecutive week, reaching an over 5-year high. The surge in prices is attributed to diminishing supplies amid reports that the country was contemplating banning exports of most rice varieties as a measure to control inflation.
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