India bans export of broken rice with immediate effect

The step has been taken in view of the astonishing growth in exports, and shortage of poultry feed and rice for ethanol production in the domestic market.

Anjali Bhatia

Anjali Bhatia

The Statesman


India bans export of broken rice with immediate effect

September 12, 2022

NEW DELHI – The Central Board of Indirect Taxes and Customs has banned export of broken rice. Union Food Secretary Sudhanshu Pandey said on Friday that the step has been taken in view of the extraordinary growth in exports and shortage of poultry feed and rice for ethanol production in the domestic market.

Not only this, the board has imposed a 20 percent duty on export of all types of rice except basmati and boiled rice. These changes will be applicable with immediate effect.

He said the price of rice in the domestic market had started climbing continuously, it increased from Rs 16 per kg in January to Rs 22 per kg till September 8. In one month, the retail prices have gone up by 43 per cent, so it was necessary to control these prices. Pandey has put an end to the question of shortage of rice in the country, saying that there is sufficient stock of rice in the country.

This announcement of the government will have an impact on the domestic market prices. He said this would increase domestic inflow and availability of broken rice for poultry feed and ethanol production.

The Food Secretary said that the unexpected jump in the export of broken rice can be gauged from the fact that according to the data released by the ministry, it increased by 4178 per cent from April to September this year. Whereas in 20-18-19 2021-22 it has increased by 319 per cent in a span of four years.

In this, 93.56 lakh metric tonnes of rice was exported from April to August, in which the contribution of broken rice was 21.31 lakh metric tonnes, which is 22.78 per cent of the total exports, whereas in 2019 it was only 1.34 per cent.

In the last full year, this figure was 83.64 lakh metric tonnes. Under this restriction, exports will be allowed till September 15 in certain circumstances. There are also some points, such as loading of broken rice may have started on the ship before this ban order, where the shipping bill has been filed and the stock which has already arrived at the Indian ports and their rotation.

In fact, this time due to unusual monsoon activities, and less water falling at many places, the production of paddy this year may be lower than last year, with the possibility of its impact on rice prices in the coming times. In this context, if we assess the data released by the Ministry of Agriculture, the area under paddy has come down from 5.62 per cent to 383.99 lakh hectare in the state.

India is the second largest rice producer in the world after China, and accounts for 40 per cent of the world’s rice market. The country exported 126.53 lakh metric tonnes of rice in the financial year 2021-22, out of which 39.4 lakh metric tonnes of basmati rice was, as per official data, hence it exported 49.95 lakh metric tonnes of non-basmati rice in the same period.

The country exported non-basmati rice to more than 150 countries in 2021-22. But with this ban of the government, now there is a possibility of shifting purchases to Thailand and Vietnam. India accounts for more than 60 percent of rice exports, so buyers will move to other countries from where they can get this rice.

India is the cheapest rice supplier to the countries of the world. In such a situation, the effect of this ban is believed to be fixed on the world rice market.

China was the biggest buyer of broken rice with a purchase of 10.1 lakh metric tonnes in 2021, while African countries such as Senegal and Djibouti also bought rice from India on a large scale, before the Center in May assessed food security potential situations. Wheat export policy was amended. While banning exports, the government had said that this step has been taken to meet the needs of arrangements for overall food security of the country. The Indian government was not limited to banning wheat exports.

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