After banning wheat exports, the government is still considering whether to ban shipments of rice, officials from multiple ministries told Moneycontrol. After global rice demand shot up, especially in nations that use both wheat and rice as staples, exports from India are being monitored, they said.
India is the second-largest producer of rice in the world, behind only China, according to the Food and Agriculture Organization. Much of the rice grown in China never crosses its borders; its large population ensures that most of the output is consumed locally.
Over the past five years, India has become the largest exporter of rice in terms of volume. India commands 40 percent of the global rice trade and exports more than the next four producers -- Thailand, Vietnam, Pakistan and United States -- combined.
The continuing trend of high exports may prompt an increase in domestic prices, or early signs of a shortage of the cereal, sources said.
In mid-June, Food Secretary Sudhanshu Pandey said India has sufficient rice stocks and had no plans to restrict exports of the grain.
Now, officials from both the Commerce Department and the Finance Ministry say the dilemma over banning rice exports is far from resolved, and a final decision is yet to be taken.
Exports rising fast
Rice exports had risen to $9.6 billion in FY22. Value-wise this was 37.5 percent of the value of exported rice globally. Exports have been rising in recent years, going up to $8.8 billion in FY21 from $6.4 billion in FY20.
Commerce Department data shows that in the current financial year, rice worth $806 million had been exported in April 2022, the last month for which data is available. This was broadly similar to the $895 million of rice exported in April 2021. A year before that, rice exports had earned $525 million. Basmati remains the highest exported variety, registering $3.5 billion worth of overseas shipments in FY22.
Exports have risen after the Russian invasion of Ukraine in February, and the subsequent shortage of what and increase in its price. Currently, many nations are facing a possible food crisis owing to low stocks, the UN has warned.
"Some of these nations, which use both wheat and rice, are increasingly opting to source the latter," a Commerce Department official said.
Meanwhile, exports are set to increase to flood-hit Bangladesh. Despite being the fourth-largest producer of rice in the world, and being much smaller than the top 3-- China, India, and Indonesia -- Bangladesh has seen its rice imports shoot up over the past few years due to burgeoning demand.
According to figures from the All India Rice Exporters Association, Bangladesh imported 4.91 lakh tonnes of rice from India in 2020-21, which expanded to 9.14 lakh tonnes in 2021-22.
This figure is set to be crossed this year as media reports from the country say several private importers have already placed orders with Indian rice exporters after the latest floods destroyed crops in large parts of the country.
Apart from Bangladesh, Nepal and increasingly China, Indian rice is also highly in demand in Iran and Saudi Arabia, which are the top two export destinations. They are closely followed cumulatively by the Gulf nations, especially United Arab Emirates. Large Indian expatriate populations in these countries also contribute to the demand.
Meanwhile, a clutch of nations in faraway West Africa -- Benin, Cote D'Ivoire , Senegal, Togo, and Guinea -- are also dependent on Indian rice.
"Import inquiries from these nations have risen exponentially in the last few years and uptake from these places continue to rise fast this year as well,” the official mentioned above said.
Higher outflow
Food Corporation of India data shows that rice stocks rose for five straight months since December 2021 to 33.2 million tonnes in May. Since then, they started declining and stood marginally lower at 33.1 million tonnes as of June.
Officials say this is in line with the usual pattern of rice cultivation in the country, and the subsequent flow of rice through central warehouses.
However, this year, the central stock is expected to deplete at a faster than average rate owing to the government increasing the allocation of rice under central food schemes.
The decision was taken to reallocate the ratio of grain disbursed to beneficiaries of central food assistance programmes; rice has substituted relatively scarce wheat but the overall allocation has stayed the same.
Up to 5.5 million tonnes of wheat has been replaced by rice in the Pradhan Mantri Garib Kalyan Yojana (PMGKY) while 6.1 million tonnes of wheat has been replaced by rice under the National Food Security Act (NFSA). The government has also suspended the open market sale scheme.
Monsoon may allay fears
One official said the government may not ban rice exports owing to the better-than-average forecast for monsoon rains, key for rice production in large swathes of the country, especially in the Southern and Eastern states.
Rice cultivation is generally spread over three seasons in most states. Currently, the pre-Kharif season is under way with sowing done in the May-August period and harvesting in October-November.
Monsoon rainfall is crucial for the Kharif season when 84 percent of the crop is grown. Kharif sowing is done in June-July and harvests take place in November-December.
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