Paddy is the main Kharif crop which is sown with the onset of the southwest monsoon in June and the harvesting starts from October onwards. The Central Government restricted exports of broken rice and imposed duty on exports on various other types on 8thSeptember’22. In an attempt to boost domestic supplies, the government also imposed a 20% export duty on all varieties of non-basmati rice except for parboiled rice.
Broken Rice Traded Through India
India commands 40% share in the global rice trade and exported 21.23 Million Tonnes(MT) of rice in the 2021-22 fiscal year as against 17.78MT in the previous year(2020-21), while prior to the pandemic, the country’s exports of rice were at 9.51MT in the 2019-20 fiscal year. The United States Department of Agriculture(USDA) stated that India accounted for more than half of the global exports of broken rice in the first half of 2022. China, Senegal, Vietnam, Djibouti, and Indonesia are India’s biggest broken Rice Importers In India, broken rice is used mainly for poultry feed.
Extension Of Final Dates For Broken Rice Export
The export policy on broken rice was revised from ‘free’ to ‘prohibited’ on 8thSeptember’22 which was ordered by the Directorate General of Foreign Trade, Union Ministry of Commerce, India. The policy change came into effect on 9thSeptember’22, though some exports could go through till 15th September’22 that later changed to 30t September’22.The government has again extended the last date for export of broken rice in transit by 15 days till 15th October’22. Since the curb decision was sudden, it led to several shipments of rice getting stuck at Indian ports. On that account, the Government Of India to help rice traders deal with the decision has decided to extend the deadline for the shipments of broken rice from Sept. 15thto Sept 30th and now further to 15th October.
Reasons For Imposition of Policy Changes
India changed its export policy on broken rice because of:
- Inflation of the cost of rice due to lower production.
- Maintaining buffer stock for Pradhan Mantri Garib Kalyan Anna Yojna(PM-GKAY).
- Government’s ethanol requirement for blending fuel.
The primary reason could be lower paddy acreage due to the slow advancement of the monsoon in June and uneven spread in July in some key growing areas in the country. India exports rice to more than 150 countries and any reduction in shipments would create upward pressure on food prices around the world, which are already on a rise owing to drought, heatwaves, and Russia’s invasion of Ukraine.
Sudhanshu Pandey, Secretary, Department of Food and Public Distribution had said that an abnormal rise in exports and lower availability of broken rice in domestic markets pushed the Central Government to put a restriction on its trade. The price of broken rice which was around Rs 15-16 (per kg) increased to Rs 22 and its exports rose 3 times.* As a result, broken rice was neither available for poultry feed nor for ethanol manufacturing.