The Centre has banned the export of broken rice in view of the domestic demand and production scenario of rice. Broken rice is mainly used for consumption by domestic poultry industry and for other animal feedstock; and to produce ethanol.
- The government has imposed curbs (not outright ban), on rice shipments.
- Barely four months ago, government banned exports of wheat from the country, following an unexpected crop failure resulting in low procurement and depletion of public stocks.
What are the restrictions imposed?
- There are four categories of rice exports. Out of these, exports in the case of two -– basmati rice and parboiled non-basmati rice –- are still freely allowed.
- Parboiling is a process where the paddy is soaked in water, steamed and dried while retaining its outer husk. It results in the rice becoming harder with less breakage on milling.
- The curbs are only for the other two — raw (white) and broken non-basmati rice.
- The Department of Revenue in the Ministry of Finance had notified the slapping of a 20% duty on exports of rice other than parboiled and basmati rice.
- Later, in another notification, the Ministry of Commerce and Industry imposed a blanket ban on broken rice exports.
- Thus, even within raw non-basmati, only export of full grain consignments would be permitted on payment of 20% duty.
Impact of restrictions –
- The curbs announced will affect just under half of India’s rice exports in terms of quantity and over a third by value.
- India, in 2021-22 (April-March), shipped out a record 21.21 million tonnes (mt) of rice valued at $9.66 billion.
- That included 3.95 mt of basmati rice worth $3.54 billion (on which there are no restrictions) and 17.26 mt of non-basmati shipments valued at $6.12 billion.
- Within the latter, 7.43 mt ($2.76 billion) comprised parboiled rice exports, which will also be allowed freely.
- The restrictions apply only in respect of the balance 9.83 mt ($3.36 billion).
- This covers 3.89 mt ($1.13 billion) of broken rice, whose exports have been prohibited, and 5.94 mt ($2.23 billion) of non-parboiled non-basmati rice.
- Shipments of non-parboiled non-basmati rice will henceforth attract 20% duty.
India’s share in global rice exports –
- The country has a 40% share of the world’s total rice exports, with its 21 mt-plus shipments last year.
- It was way ahead of Thailand (7.2 mt), Vietnam (6.6 mt) and Pakistan (4.8 mt).
- More than 75% of basmati exports last year were to Iran and the Arabian Peninsula countries. The US, UK, Canada and Australia added up to another 10%.
- In non-basmati rice, almost 55% went to African countries.
- Much of exports to Africa and Bangladesh consist of parboiled rice, while China’s imports were predominantly broken rice that has now been banned.