Govt introduces additional safeguards to ensure restricted rice varieties are not exported out of the country

It has been noticed that despite restriction on certain varieties, rice exports have been high during the current year, a press statement by the Ministry of Commerce has said.

The government, noticing that rice exports of restricted varieties are continuing despite ban, on August 27 introduced additional safeguards.

As per the notification issued by DGFT in this regard, contracts for Basmati exports with the value of $ 1200 per mt only and above will have to be registered for issue of Registration – cum – Allocation Certificate (RCAC).

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“Contracts with the value of below $1200 per mt may be kept in abeyance and will be evaluated by a committee to be set up by the Chairman, APEDA, for understanding the variation in prices and use of this route for export of non-Basmati white rice,” it added.

Agricultural & Processed Food Products Export Development Authority (APEDA) has also been asked to hold consultations with trade to sensitize them about the matter and work with them to discourage any use of this window for export of non-basmati white rice.

It has been noticed that despite restriction on certain varieties, rice exports have been high during the current year, a press statement by the Ministry of Commerce has said.

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Per the statement, up to August 17, total exports of rice (other than broken rice, export of which is prohibited) were 7.33 mmt compared to 6.37 mmt during the corresponding period of previous year, registering an increase of 15.06 percent.

There has also been a spurt in the export of parboiled rice and Basmati rice- both of these varieties did not have any restriction on exports. While the export of parboiled rice has grown by 21.18 percent (3.29 mmt during the current year compared to 2.72 mmt during previous year), export of Basmati rice has increased by 9.35 percent (1.86 MMT during the current year compared to 1.70 MMT during previous year).

Export of non-basmati white rice, which had an export duty of 20 percent since September 9, last year and was prohibited on July 20 this year, has also registered an increase of 4.36 percent (1.97 mmt compared to 1.89 mmt during previous year).

On the other hand, as per third Advanced Estimate of Department of Agriculture & Farmers Welfare, during the Rabi Season 2022-23, the production was only 158.95 LMT against 184.71 LMT during Rabi Season of 2021-22, registering a decline of 13.84 percent, the statement has further noted.

Internationally, due to strong demand from Asian buyers, production disruptions registered in 2022/23 in some major producing countries like Thailand, and fears of possible adverse effect of the onset of El Nino, international rice prices have also been rising continuously since last year.

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The FAO Rice Price Index reached 129.7 points in July 2023; its highest value since September 2011, registering an increase of 19.7 percent over past year levels. As the prices of Indian rice are still cheaper than the international prices, there has been a strong demand for Indian rice, resulting in record exports during 2021-22 and 2022-23.

“The Government has received credible field reports regarding misclassification and illegal export of non-basmati white rice, export of which has been prohibited with effect from July 20.

It has been reported that non-basmati white rice is being exported under the HS codes of parboiled rice and Basmati rice,” the statement said.