India’s rice exports may drop 4-5 million tons after ban on broken rice, 20% tax

NEW DELHI: India’s rice exports may fall by 4-5 million tons this fiscal year due to the imposition of a ban on broken rice as well as export tax on non-basmati rice, excluding cooked grains , the exporter said.
India, which holds a 40% market share in the global rice trade, exported 21.23 million tonnes of rice in fiscal 2021-22 compared with 17.78 million tonnes in the previous year. Before the COVID pandemic, the export volume was 9.51 million tons in the fiscal year 2019-20.
During the April-August period of the current financial year, government data shows that the country exported 9.35 million tons compared with 8.36 million tons in the same period last year.
“Exports may fall to 16-17 million tonnes this fiscal year due to the ban on broken rice and 20% export tax,” said former president of All India Rice Exporters Association (AIREA). Vijay Setia told PTI.
He said the country is exporting non-basmati rice at $380-400 per tonne, which is lower than export prices from other countries.
Prices are expected to improve on par with our competitors” following these decisions, Setia speak.
On Fridays, the Culinary Clerk Sudhanshu Pandey explain the reason behind the ban on broken rice exports.
There has been an “absolutely unusual” increase in shipments of broken rice, and broken grains are not available in sufficient quantities for animal feed or the ethanol blending program, Pandey said.
“During the period from April to August this fiscal year, the share of broken rice exports increased to 22.78% compared to 1.34% in the corresponding period of 2019-20,” the minister said.
India exported 3.89 million tons of broken rice in the fiscal year 2021-22 and of which China imported 1.58 million tons of broken rice in the last financial year.
Broken rice exports reached 2.06 million tons in 2020-21, only 2.70,000 tons in 2019-20 and 1.22 million tons in 2018-19 period.
During the April-August period of this financial year, broken rice exports increased to 2.13 million tons from 1.58 million tons in the same period last year.
“The broken rice export policy … is revised from ‘free’ to ‘forbidden'”, the General Department of Foreign Trade (DGFT) said in an announcement dated September 8, 2022.
Notice effective Friday, September 9, 2022.
According to the DGFT announcement, the provisions of Foreign Trade Policy 2015-2020 regarding the transition agreement will not apply to this notice. It added that during September 9-15, some broken rice shipments will be allowed to be exported.
The government has not changed its policy on parboiled rice so that farmers can continue to get good prices. There is no ban nor customs duty on the export of basmati rice.
Basmati rice shipments fell to 3.94 million tonnes in the previous financial year from 4.63 million tonnes in 2020-21. However, during the April-August period of this financial year, exports of premium basmati rice rose to 1.82 million tons from nearly 1.7 million tons in the same period last year.
For the non-basmati variety, parboiled rice exports increased to 7.43 million tons in FY22 from 6.17 million tons in the previous fiscal, while shipments of unmarried rice increased to 5.21 million tons from 4.23 million tons.
The increase in domestic wholesale and retail rice prices is also one of the reasons cited by the government for imposing restrictive measures.
Wholesale prices rose 8% to Rs 3,291 per quintal on September 7 from Rs 3,041 per quintal a year ago, while retail prices rose 6.38% to Rs 37.5 per quintal from Rs 35.25/kg kg.
The price of animal feed also increased. Corn price increased from Rs 19/kg on Jan 1, 2022 to Rs 24/kg on Sep 8, 2022. Broken rice price also increased from Rs 16/kg to Rs 22/kg during the same period.
On Thursday, the government imposed a 20% export tax on non-basmati rice, excluding parboiled rice.
According to an announcement by revenue division, an export tax of 20% has been imposed on ‘husked rice (paddy or raw)’ and ‘husked (brown) rice’. The export tax came into effect from September 9.
The ban on broken rice and a 20% export tax on non-basmati rice, expected for cooked rice, have been imposed amid concerns about the potential reduction in rice production.
According to Agriculture Ministry data released on Friday, the area covered for the rice crop has decreased by 4.95% to 393.79 thousand hectares during the ongoing kharif season so far due to poor rains in several states , according to Department of Agriculture data released on Friday.
The data show that rice was sown on an area of ​​414.31 thousand ha (LH) in the previous one year period. It is the main kharif crop and its sowing begins with the onset of the southwest monsoon in June and is harvested from October onwards.
India’s total rice production in crop year 2021-22 (July-June) is estimated to reach a record 130.29 million tonnes (111.76 million tonnes in kharif and 18.53 million tonnes in rabi). compared with 124.37 million tons of the previous year.
On Friday, the Food Ministry said that the country’s rice production in kharif (summer sowing) may decrease by 6-7 million tons but the country still has a surplus.
The center has a stockpile of 47 million tons of rice, including rice equivalent to unmilled rice, as of July 1. The buffer stock requirement is 13.5 million tons of rice as of July 1.

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