Curbs on rice exports

Indian government has prohibited the export of white rice, and levied a 20% export duty on par-boiled rice.

India’s prohibition on exports of rice:

• Government has prohibited the export of white rice and levied a 20% export duty on par-boiled rice to check domestic rice prices and ensure domestic food security.
• Government has permitted the export of Basmati rice for contracts with a value of $1,200 a tonne or above.
• The export of broken rice has been prohibited since 2022, but when permitted by the government, it can be exported to other countries to meet their food security needs and based on the request of their government.

What is the rice production estimate?

• During the Rabi season 2022-2023, rice production was 13.8% less as compared to 2021-2022 as per the Third Advanced Estimate of the Department of Agriculture and Farmers Welfare.
  • Rabi crops or rabi harvest are crops that are planted in winter and harvested in the spring in India.
  • The rabi crops include wheat, barley, oats (cereals), chickpea/gram (pulses), linseed, garlic, cumin, coriander, mustard (oilseeds) etc.
• Kharif sowing data show that rice is sown on 384.05 lakh hectares in 2023 compared with 367.83 lakh hectares during the same period in 2022.
  • Kharif Crops is mainly grown during the monsoon season in India, which starts around June and lasts till September as it requires high temperatures, rainfall and humidity.
  • Kharif crops include rice, maize, jowar, millet/bajra, finger millet/ragi, arhar, soyabean, groundnut, cotton, mung, etc.
• There will be delayed in sowing due to a shortfall in the south west monsoon in states such as Tamil Nadu where the Samba crop sowing starts usually in August in the Cauvery delta area.
  • Samba is a variety of rice grown in Tamil Nadu, some other parts of India and Sri Lanka, and has a small ovular grain, compared to the long grain of basmati rice.
• El Nino effects are likely to impact new season crop arrivals to some extent.

India as a rice exporter:

• India is the world’s largest rice exporter with a 45% share in the world rice market.
• Rice exports in April-May of 2023 were 21.1% higher compared with the same period in 2022.
• In May 2023, export of Basmati rice was 10.86% higher than its exports in May 2022.
• Non-Basmati rice shipments were 7.5% more, despite the government introducing a 20% export duty on white rice and prohibiting the export of broken rice in 2022.
• In 2022, India shipped more rice than the combined shipment of the four next biggest exporters– Thailand, Vietnam, Pakistan and the United States.
• Key buyers of Indian non-basmati rice: Benin, Bangladesh, Angola, Cameroon, Djibouti, Guinea, Ivory Coast, Kenya and Nepal.
• Iran, Iraq and Saudi Arabia mainly buy premium basmati rice from India.

Impact on Farmers:

• The government has increased the Minimum Support Price (MSP) for rice, and the paddy procured by rice millers are at a price higher than the MSP.
• The prices will not decline for farmers as the restrictions on exports are to ensure that there is no steep climb in rice prices in the market.

Effects on international market:

• Prices of Indian par-boiled rice in the international market is competitive even with the levy of a 20% duty.
• Countries such as Indonesia, which are rice exporters, are looking at imports (raw rice) hence “International demand is very high”.

About par-boiled rice and broken rice:

Par-boiled rice:

• Parboiled rice is rice that has been partially boiled in the husk.
• Parboiling drives nutrients, especially thiamin, from the bran to the endosperm, hence parboiled white rice is mostly nutritionally similar to brown rice.
• Given the pale tan color that results from these bran components, parboiled rice is sometimes called saffron sella.

Broken rice:

• Broken rice is fragments of rice grains, broken in the field, during drying, during transport, or during milling.
• Mechanical separators are used to separate the broken grains from the whole grains and sort them by size.
• Broken rice is fragmented, not defective.

Other key facts:

• 12 Indian varieties of rice have Geographical Indication (GI) recognition.

Ref: Source