The Indian government has undertaken measures to restrict the export of rice. As of July 20, 2023, the export of non-basmati white rice has been completely prohibited.
Despite these restrictions on certain rice varieties, there has been a notable surge in rice exports during the current year. Up to August 17, 2023, India has exported a total of 7.33 million metric tons (MMT) of rice (excluding broken rice, which is also prohibited for export), compared to 6.37 MMT during the same period last year. This marks a significant increase of 15.06%.
Notably, there has been a substantial rise in the export of parboiled rice and Basmati rice, both of which were not subject to export restrictions. Parboiled rice exports have grown by 21.18%, reaching 3.29 MMT during the current year compared to 2.72 MMT in the previous year. Basmati rice exports also increased by 9.35%, with 1.86 MMT exported during the current year compared to 1.70 MMT in the previous year. Even non-basmati white rice, which had been subjected to a 20% export duty since September 9, 2022, and was prohibited from export starting July 20, 2023, experienced a 4.36% increase in exports (1.97 MMT compared to 1.89 MMT in the previous year).
However, concerning these developments, the Department of Agriculture & Farmers Welfare’s third Advanced Estimate reported a decline in production during the Rabi Season 2022-23, with production standing at 158.95 million metric tons (LMT) compared to 184.71 LMT in the previous Rabi Season, marking a decrease of 13.84%.
Internationally, the rise in demand from Asian buyers, production disruptions in 2022/23 in major rice-producing countries like Thailand, and concerns regarding the onset of El Nino have led to continuous increases in international rice prices since the previous year. The FAO Rice Price Index reached 129.7 points in July 2023, the highest level since September 2011, signifying a remarkable 19.7% increase over the past year. With Indian rice prices still competitively priced compared to international rates, the demand for Indian rice has remained robust, 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, which has been prohibited since July 20, 2023. There are reports of non-basmati white rice being exported under the HS codes designated for parboiled rice and Basmati rice.
To address this issue, the Agricultural & Processed Food Products Export Development Authority (APEDA), responsible for regulating Basmati rice exports, has been instructed to implement additional safeguards:
- Contracts for Basmati exports with a value of USD 1200 per metric ton (MT) or higher should be registered for the issuance of Registration-cum-Allocation Certificates (RCAC).
- Contracts with a value below USD 1200 per MT will be temporarily held for evaluation by a committee established by the Chairman of APEDA. This committee will scrutinize price variations and the use of this route for exporting non-basmati white rice. The committee is expected to submit its report within one month, following which appropriate decisions will be made regarding lower-priced Basmati rice exports as planned by the industry.
- APEDA will engage in consultations with the trade to raise awareness about the issue and collaborate with them to discourage any misuse of this window for non-basmati white rice exports.