Govt imposes 20% export duty on parboiled rice

India had last month banned the export of non-white basmati rice

The government has imposed a 20 percent export duty on parboiled rice, as per an official notification issued late on August 25.

The move comes a month after the government had imposed a ban on the export of widely consumed non-basmati white rice.

The curbs, say experts, is driven by the fears of El Nino, as reduced rainfall activity may strain the supplies of the staple grain in the domestic market.

India is one of the significant exporters of parboiled rice, with the total exports in this category of rice amounting to 7.4 million tons in 2022.

Meanwhile, the country's ban on export of non-basmati white rice may continue till at least November as it remains apprehensive about the impact of El Nino on the sowing of kharif crops, a government official aware of the matter said.

“There are a lot of predictions on how El Nino might impact Kharif crops; the government has erred on the side of caution, so, in case El Nino has an impact, the government would have already taken action,” the official told Moneycontrol, on condition of anonymity, earlier this month.

Behind New Delhi’s stance of keeping the ban on some rice exports until November at the least is not only to keep a check on domestic prices but also to ensure sufficient availability of the grain, the official told Moneycontrol earlier this month, on the condition of anonymity.

Any decision on rolling back the prohibition can only be considered after the sowing season for Kharif crops ends, enabling the government to assess the yield for the current year, the official said. He added that a decision to lift the ban would be based on the performance of the monsoon crops.

Behind New Delhi’s stance of keeping the ban on some rice exports until November at the least is not only to keep a check on domestic prices but also to ensure sufficient availability of the grain, the official added. As of August 7, retail prices of rice had risen 10.63 percent on year, whereas in the wholesale market, they had registered a spike of 11.12 percent in the comparative period.

Apart from the prohibition on certain rice exports from July 20, the Indian government has also been selling rice under the Open Market Sale Scheme (OMSS) to bring down prices of essential commodities. It has lowered the reserve price of the grain to get a better response in the auctions.