INDIA – India has lifted its ban on white non-basmati rice exports as the world’s largest grain exporter sees swelling stocks and prepares for a new harvest in the coming weeks.
This strategic decision is expected to increase global rice supplies, potentially driving down international rice prices and pushing other major exporters, such as Pakistan, Thailand, and Vietnam, to lower their rates in response.
In a government order, New Delhi set a US$490 floor price per metric tonne for non-basmati white rice exports. Additionally, the government recently reduced the export tax on white rice to zero.
“The export policy for non-basmati white rice (semi-milled or wholly milled rice, whether or not polished or gazed) is amended from prohibited to free, subject to MEP of US$490 per tonne with immediate effect and until further orders,” the directorate general of foreign trade (DGFT) said in a notification.
This move is part of broader efforts to relax restrictions on various rice varieties. Earlier this month, the government cut the export duty for parboiled rice from 20% to 10% and removed the price floor for basmati rice exports, helping Indian farmers access key overseas markets in Europe and the Middle East.
According to the general, the easing of these restrictions is driven by India’s growing rice stocks.
As of September 1, the Food Corporation of India (FCI), the country’s state-owned rice agency, reported 32.3 million metric tonnes of rice in its warehouses, a 38.6% year-on-year increase.
This surge in reserves followed a 2023 export ban, imposed due to concerns over local supply in light of the El Niño weather pattern, which often affects the Indian monsoon.
Fearing a potential poor harvest, India sought to control local rice prices ahead of the national elections slated for April to June 2024.
Moreover, farmers are gearing up for another strong season, having planted rice on 41.35 million hectares (102.18 million acres), up from 40.45 million hectares (99.95 million acres) last season. This acreage also exceeds the five-year average of 39.09 million hectares (99.09 million acres).
According to experts, India’s decision to resume white non-basmati rice exports is expected to ripple across the global rice market.
The increased supply from India is anticipated to put downward pressure on international prices, compelling other major rice exporters to adjust their pricing strategies.
“Despite the export tax on parboiled rice and the US$490 floor price per metric ton, Indian rice will remain competitive,” stated B.V. Krishna Rao, President of the Rice Exporters Association of India.
He believes that India’s pricing will continue to attract buyers, even with the slight cost adjustments.
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