Understanding curbs on rice exports

Syllabus:  Agriculture-Exports

The story so far

In a move to check domestic rice prices and ensure domestic food security, the Indian government has prohibited the export of white rice, levied a 20% export duty on par-boiled rice till October 15, and permitted the export of Basmati rice for contracts with value of $1,200 a tonne or above. The export of broken rice has been prohibited since last September. However, it is allowed on the basis of permission granted by the government to other countries to meet their food security needs and based on the request of their government.

Rice production estimate

  • The third Advanced Estimate of the Department of Agriculture and Farmers Welfare, during the Rabi season 2022-2023, rice production was 13.8% less, at 158.95 lakh tonnes against 184.71 lakh tonnes during Rabi 2021-2022.
  • Kharif sowing data show that rice is sown on 384.05 lakh hectares this year as on August 25 compared with 367.83 lakh hectares during the same period last year.
  • In States such as Tamil Nadu where the Samba crop sowing starts usually in August in the Cauvery delta area, a section of farmers says there will be delayed sowing due to a shortfall in the south west monsoon.
  • Trade and rice millers say that new season crop arrivals will start after the first week of September and that El Nino effects are likely to impact arrivals to some extent.

What about rice exports?

  • India is the largest rice exporter globally with a 45% share in the world rice market.
  • Overall rice exports in April-May of 2023 were 21.1% higher compared with the same period last financial year.
  • In May alone, export of Basmati rice was 10.86% higher than its exports in May 2022.
  • Non-Basmati rice shipments were 7.5% more, despite the government introducing a 20% export duty on white rice and prohibiting the export of broken rice last September.

What can Indian farmers expect?

  • The government has increased the Minimum Support Price (MSP) for rice, and the paddy procured now by rice millers are at a price higher than the MSP.
  • The prices will not decline for farmers.
  • The restrictions on exports will ensure that there is no steep climb in rice prices in the market

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