INDIA— India has banned exports of broken rice and imposed a 20% duty on exports of various grades of rice in a bid to augment supplies and calm local prices after below-average monsoon rainfall curtailed planting.
The finance ministry announced the move commenting that “circumstances exist which render it necessary to take immediate action”.
Below-average rainfall in key rice-producing states such as West Bengal, Bihar and Uttar Pradesh has raised concerns over India’s rice production. The country has already banned wheat exports and restricted sugar shipments this year.
About 10 million tonnes of exports are likely to be affected as per various reports post the ban that came into effect on September 9. Indian exports would fall by at least 25% in coming months because of the duty, said Himanshu Agarwal, executive director at Satyam Balajee, India’s biggest rice exporter.
India is the world’s leading exporter of rice, accounting for about 40 per cent of the global trade, thus the reduction in its shipments would increase upward pressure on food prices, which are already rising because of drought, heat-waves and Russia’s invasion of Ukraine.
About 10 million tonnes of exports are likely to be affected as per various reports post the ban that came into effect on September 9. Indian exports would fall by at least 25% in coming months because of the duty.
India had been exporting record quantities of rice around the world following bumper harvests the last few years. Its rice exports touched a record 21.5 million tonnes in 2021, more than the combined shipments of the world’s next four biggest exporters of the grain: Thailand, Vietnam, Pakistan and the United States.
India’s exports had kept the price of rice in check. In fact, India has been cheapest supplier of rice by huge margin. Almost 55 per cent of non-basmati rice from the country goes to African nations like Ivory Coast, Senegal, Togo, Guinea, Madagascar, Cameroon, Djibouti, Somalia and Liberia. This has shielded these countries to an extent from a rally in wheat and corn prices.
The policy change has become significant, as India has been facing weather problems over the past few months. India banned exports of wheat in May and wheat products like refined flour and whole wheat flour in August to manage its food security needs amid rising domestic prices as output declined due to severe heat waves.
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