India's rice exports could fall by 4-5 million tonnes this fiscal year due to imposition of ban on broken rice as well as export duty on non-basmati rice, except for parboiled grains, exporters said.
India, which commands 40 per cent share in the global rice trade, exported 21.23 million tonnes of rice in 2021-22 fiscal as against 17.78 million tonnes in the previous year. Before the COVID pandemic, the exports were 9.51 million tonnes in the 2019-20 fiscal.
During April-August period of the current financial year, the government data showed that the country has already exported 9.35 million tonnes as against 8.36 million tonnes in the year-ago period. "The exports may fall to 16-17 million tonnes in this financial year because of ban on broken rice and 20 per cent export duty," All India Rice Exporters Association (AIREA) former president Vijay Setia told PTI.
He said the country was exporting non-basmati rice for USD 380-400 per tonne, lower than the rate of shipments from other countries. The price realisation is "expected to improve at par with our competitors" after these decisions, Setia said.
On Friday, food secretary Sudhanshu Pandey explained the rationale behind the ban on exports of broken rice. There has been an "absolutely abnormal" rise in shipments of broken rice and the broken grains were also not available in sufficient quantity for animal feed as well as ethanol blending programme, Pandey had said.
"During April to August this fiscal, the export share of broken rice increased to 22.78 per cent as compared to the 1.34 per cent in the corresponding period of 2019-20," the secretary had said. India exported 3.89 million tonnes of broken rice in 2021-22 fiscal and out of that China imported 1.58 million tonnes of broken rice last fiscal year.
Exports of broken rice stood at 2.06 million tonnes in 2020-21, just 2,70,000 tonnes in 2019-20 and 1.22 million tonnes in 2018-19. In the April-August period of this fiscal year, the export of broken rice increased to 2.13 million tonnes from 1.58 million tonnes in the year-ago period.
"Export policy of broken rice ...is amended from 'free' to 'prohibited'," the Directorate General of Foreign Trade (DGFT) said in a notification dated September 8, 2022. The notification comes into effect from Friday, September 9, 2022.
As per the DGFT notification, provisions under the Foreign Trade Policy 2015-2020 regarding the transitional arrangement shall not be applicable to this notification. It added that during September 9-15, certain consignments of broken rice will be allowed to be exported. The government has made no policy change in parboiled rice so that farmers continue to get good remunerative prices. There is neither a ban nor customs duty on exports of basmati rice.
Shipments of basmati rice fell to 3.94 million tonne in last fiscal from 4.63 million tonne in 2020-21. However, during April-August of this fiscal, the exports of premium basmati rice went up to 1.82 million tonnes as against nearly 1.7 million tonnes in the year-ago period. In the non-basmati category, exports of parboiled rice increased to 7.43 million tonnes in FY22 from 6.17 million tonnes in the previous fiscal, while shipments of non-parboiled rice rose to 5.21 million tonnes from 4.23 million tonnes.
The up tick in domestic wholesale and retail prices of rice was also one of the reasons cited by the government for imposing restrictions. The wholesale prices have risen by 8 per cent to Rs 3,291 per quintal as on September 7 from Rs 3,041 per quintal a year ago, while the retail prices have gone up by 6.38 per cent to Rs 37.5 per kg from Rs 35.25 per kg.
Animal feed prices too have also gone up. Maize price increased from Rs 19 per kg on January 1, 2022 to Rs 24 per kg on September 8, 2022. Broken rice price has also increased from Rs 16 per kg to Rs 22 per kg during the same period. On Thursday, the government imposed a 20 per cent export duty on non-basmati rice except for parboiled rice.
According to a notification by the revenue department, an export duty of 20 per cent has been imposed on 'rice in husk (paddy or rough)' and 'husked (brown) rice'. The export duty comes into effect from September 9. The ban on broken rice and export duty of 20 per cent on non-basmati rice, except for pa-boiled, have been imposed amid concern over the likely fall in rice output.
The area under coverage for the paddy crop has declined by 4.95 per cent to 393.79 lakh hectare in the ongoing kharif season so far due to poor rains in some states, according to the agriculture ministry data released on Friday. Paddy was sown in 414.31 lakh hectares (LH) in the year-ago period, the data showed. It is the main kharif crop and its sowing begins with the onset of the southwest monsoon in June and harvesting from October onwards.
India's total rice production during 2021-22 crop year (July-June) is estimated at a record 130.29 million tonnes (111.76 million tonnes in kharif and 18.53 million tonnes in rabi season) as against 124.37 million tonnes in the previous year. The food ministry has said on Friday that the country's rice production in kharif (summer sown) could fall by 6-7 million tonnes, but the country would still have surplus output.
The Centre is sitting on a stock of 47 million tonnes of rice, including rice equivalent of unmilled paddy, as of July 1. The buffer stock requirement is to have 13.5 million tonnes of rice as of July 1.
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